Regarding your question, not sure if you already tried the following steps, but those are the ones we use to create a virtual drive:
Go to “disk management”
Look for the option that says “Actions”
Then select: “Create VHD”
Assign a name to it and after that select the location where you want to save it and then the size
After that we recommend to choose VHD and Fixed size
Go back to disk management look for “Actions”and attached the VHD to disk management
Right click where you see the name of the disk and choose “Initialize disk”
Then choose GPT partition
And once you do that right click on it and select “new simple volume” to create a volume for it and that should be it.
I hope this information was useful for you, and if you are using different steps to create a VHD please let us know in order for us to try to confirm if they work properly.
Any further questions, please let me know.
Thankyou for you reply Alberto. I did try this using DiskPart however Microsoft articles state that VHD's should be detached prior to restarting the OS?
You are welcome.
Thank you for letting us know that information.
That is the way we recommend to follow to create the VHD, we not have any documentation stating that the VHD's should be detached prior to restarting the OS, let me apologize for that, so, in that case then the best thing to do will be to get in contact directly to Microsoft, in order to confirm that information or to get more suggestions.
Microsoft’s phone number: 1 800-642-7676
Microsoft’s support site: https://support.microsoft.com/en-us
Any questions, please let me know.