Trading facility

Our client company was set up to develop a product related to the renewable energy sector. It may take up to ten years before the product is fully operational and institutional funders will provide the initial significant funding that will be required through a mix of debt and equity.

The development work is complex. The first five years will involve feasibility studies design and obtaining permissions consents and licences etc.

Only then will it be possible to build a tangible product which will be an operational facility rather than a mass-produced product for sale.

Inevitably there is uncertainty regarding the success of the project and whether once completed the company will operate it or whether it will be sold to say a major energy provider.

Our question is whether the company is trading for tax purposes. If it...