No disposal

The appellant bought a commercial property in 1990 for £1.4 million which was part financed by a £1 million interest-only loan from the bank.

Unable to find a lessee for the building in 1992 he restructured the loan. In April 1993 he entered into a contract to sell the property to R for £400 000 completion date being 31 December 1993 although this was later put back a year.

At the same time R agreed with the appellant to grant the appellant the right to repurchase the property for £400 000 plus 10% of any increase in value before 31 December 1995. In November 1994 R agreed to sell the property to appellant for £420 000 and this was to be treated as the exercise of the option to repurchase the property.

The same day the appellant agreed to sell the...