DSB was incorporated on 1 January 2019. The directors report in the financial statements for its first financial year, i.e. financial year 2019 stated that the company is principally involved in property investment holding activities. During the financial year, the company purchased its first piece of land (Land 1) on 1 March 2019 for its intended property investment activities. The land was classified as non-current assets (investment property) in the financial statements.

The land was acquired with the intention to develop the land into retail offices for rental. The purchase of the land was financed by interest-free advances from the parent company. DSB has no intention to develop the land into completed properties for sale. It has no aspiration to be a property developer. DSB submitted the development plan to the local authority for construction of retail offices. The construction will be carried out by a contractor engaged by DSB. The earth work and construction activities have yet to commence.

In October 2021, DSB learned that the market value of the bare Land 1 has appreciated significantly due to the on-going mixed development projects that are located a few kilometres away from Land 1. DSB has received an offer from the third party to sell the land at an attractive price. At the same time, DSB has identified another piece of land (Land 2) which would be a good buy as the land is below the market value. In November 2021, DSB disposed of Land 1 to the third party who made the offer and bought Land 2 for development into the retail offices for rental.

By referring to the badges of trade, infer your opinion whether disposal of the land by DSB will be subject to income tax or real property gains tax.