Principal private residence relief was available on the appropriation to trading stock of part of a householder’s garden before disposal of the property to a developer. 

In November 1995, the appellant purchased a property in Oxfordshire for £120,000. In 2015, the appellant reached an agreement with a property developer (MD) (on behalf of his company) for the sale of part of the land at the rear of the property. The agreed price was £295,000. The land in question was at that stage part of the garden of the property. MD intended to build two houses on the land. MD’s company obtained planning permission for the development on 23 April 2015.  

By 2 June 2016. formal contracts had still not been agreed. MD’s company was keen to begin work on the development. To provide some comfort to MD, the appellant signed a letter from MD dated 2 June 2016, which included: ‘We have agreed heads of terms which are