The scheme, which was marketed at high-net worth individuals, used artificial transactions to generate tax relief from a property business which owned agricultural land.

Although the land existed, the transactions were only generated to create an artificial loss that could be set off by users of the scheme against their other income. This would then reduce their end-of-year tax bill.

To combat this, legislation was introduced on 13 March as part of the Finance Bill 2012 to prevent property business loss relief arising from tax motivated arrangements.

The Treasury has also introduced legislation to stop post-cessation property relief being used artificially to avoid tax.

Post-cessation property relief allows a person to claim a deduction in their income tax calculation for certain payments and bad debts after their UK property business has ceased.

David Gauke, Exchequer Secretary to the Treasury, said: “At a time when our top economic priority is reducing the deficit, it is unacceptable for anyone to try to avoid paying a fair share.

“Today’s action will not affect legitimate agricultural businesses, but by acting swiftly, the Government has prevented this scheme being used by people who want to escape paying the tax they owe.”