The First Tier Tribunal (FTT) ruled that Christopher Drake was not entitled to £220,000 worth of allowable loss when he failed to make a payment relating to a contract he had signed and said that HMRC’s closure notice of £60,762.80 of capital gains tax (CGT) was a reasonable request.

In 2014, Drake entered a contract with the seller for the grant of a lease of a plot of land in London worth £2.2m. He had to pay a deposit of 10% of the total lease premium at the date of the contract, which was called the stage payment, and 10% one year later.

If Drake failed to make either payment, the seller could treat this as a rejection of the contract, and he was entitled to transfer the contract after payment of the deposit and stage payment.