Never completed

The taxpayer bought some land for £1.4 million in 1990. However the value of the land fell and in April 1993 he agreed to sell it to R Ltd for £400 000.

On the same day he and R Ltd entered into an option agreement whereby R Ltd granted the taxpayer the right to repurchase the property.

The 1993 contract did not complete so the parties agreed to extend the completion date to December 1994.

In November 1994 the taxpayer agreed to sell the property to B Ltd of which he was the controlling shareholder for £600 000.

In order to do this he made a contract with R Ltd to repurchase the property from R Ltd for £420 000 although R Ltd had never actually taken possession of the property and legal title had remained with the taxpayer ...