Never had any value

The taxpayer was a farmer and property developer. In 2000 he bought a ship for £980 000 through a company as a development project.

An initial issue of 1 000 shares was made of which 600 were subscribed for by the taxpayer and the rest were allotted to family members.

In addition to the purchase price he had to make a donation to the charity which previously owned the ship take on three members of the charity’s staff pay a consultancy fee to one of the charity’s trustees honour various agreements and carry out extensive refurbishment to the ship.

However the business did not run smoothly and the company fell into financial difficulties entering into administration in 2004. The administrator continued the company’s business but disposed of the ship the goodwill and assets for £250 000. The...