The appellant, who had been a stockbroker, decided to make a living as an interior designer. He set up a company (K) and began in the high-end residential market. The appellant subsequently decided to break into the commercial property market, which was potentially very lucrative. However, various difficulties existed in establishing a business in that sector.

The appellant funded K (which made trading losses) through a loan account. The sums owing to the appellant on his loan account steadily increased, and by January 2013 had reached £616,959. The appellant decided to write off £350,000 of the £616,959 loan and to wind down the business in an orderly fashion, ensuring all external creditors were paid. A redundancy programme was