5(1)Subject to sub-paragraph (4) below, where a person resident and ordinarily resident in the United Kingdom disposes otherwise than by way of bargain at arm's length (but not by way of gift) of an asset acquired or to be acquired by him so that there is an acquisition and disposal of the asset by him, and the person acquiring the asset on that disposal is also resident and ordinarily resident in the United Kingdom, then on an election being made in that behalf the person disposing of the asset and the person acquiring it on that disposal shall be treated as doing so for a consideration equal to whichever is the higher of—
(a)the actual consideration ; and
(b)such amount as will secure that neither a gain nor a loss accrues to the person disposing of the asset from his acquisition and disposal of it:
Provided that this sub-paragraph shall not apply so as to increase the amount of the consideration for which those persons are respectively treated as disposing of and acquiring the asset.
(2)An election under this paragraph shall be made jointly by the person disposing of the asset and the person acquiring it, except that an election may be made by the person disposing of the asset alone if the person acquiring it would not, on disposing of it, be chargeable to tax under Case VII in respect of the gain (if any) accruing to him from his acquisition and disposal of it.
(3)In a case falling within paragraph (b) of subsection (3) of section twelve of this Act, the amount referred to in paragraph (b) of sub-paragraph (1) above shall be taken to be higher than the actual consideration referred to in paragraph (a).
(4)This paragraph shall not apply to a disposal of assets by a company by way of distribution in respect of shares in the company, nor shall it apply where the person disposing of the asset is, but the person acquiring it is not, in relation to his acquisition and disposal of the asset, within section fourteen of this Act.