Section 146 | Gifts to charities etc.

(1)Subsection (2) below shall apply where a disposal of an asset is made otherwise than under a bargain at arm’s length—

(a)to a charity, or

(b)to any of the bodies mentioned in Schedule 3 to the Capital Transfer Tax Act 1984 (gifts for national purposes, etc.).^F1

(2)Section 29A(1) above (consideration deemed to be equal to market value) and section 147(3) below shall not apply; but if the disposal is by way of gift (including a gift in settlement) or for a consideration not exceeding the sums allowable as a deduction under section 32 above, then—^F2

(a)the disposal and acquisition shall be treated for the purposes of this Act as being made for such consideration as to secure that neither a gain nor a loss accrues on the disposal, and

(b)where, after the disposal, the asset is disposed of by the person who acquired it under the disposal, its acquisition by the person making the earlier disposal shall be treated for the purposes of this Act as the acquisition of the person making the later disposal.

(3)Where, otherwise than on the termination of a life interest (within the meaning of section 55 above) by the death of the person entitled thereto, any assets or parts of any assets forming part of settled property are, under section 54 or 55 above, deemed to be disposed of and re-acquired by the trustee, and—^F3

(a)the person becoming entitled as mentioned in section 54(1) above is a charity, or a body mentioned in Schedule 3 to the Capital Transfer Tax Act 1984 (gifts for national purposes, etc.), or^F1F4

(b)any of the assets which, or parts of which, are deemed to be disposed of and re-acquired under section 55(1) above are held for the purposes of a charity, or a body mentioned in the said paragraph 12,^F5

then, if no consideration is received by any person for or in connection with any transaction by virtue of which the charity or other body becomes so entitled or the assets are so held, the disposal and re-acquisition of the assets to which the charity or other body becomes so entitled or of the assets or parts of the assets which are held as mentioned in paragraph (b) above shall, notwithstanding sections 54 and 55 above, be treated for the purposes of this Act as made for such consideration as to secure that neither a gain nor a loss accrues on the disposal.