(1)Subject to subsection (5) below, this section applies where a person (A) has contracted to sell securities and, to enable him to fulfil the contract, he enters into an arrangement under which—
(a)another person (B) is to transfer securities to A or his nominee, and
(b)in return securities of the same kind and amount are to be transferred (whether or not by A or his nominee) to B or his nominee.
(2)Subject to subsection (5) below, this section also applies where, to enable B to make the transfer to A or his nominee, B enters into an arrangement under which—
(a)another person (C) is to transfer securities to B or his nominee, and
(b)in return securities of the same kind and amount are to be transferred (whether or not by B or his nominee) to C or his nominee.
(3)Any transfer made in pursuance of an arrangement mentioned in subsection (1) or (2) above shall not be taken into account for the purposes of the Tax Acts in computing the profits or losses of any trade carried on by the transferor or transferee.
(4)Any disposal and acquisition made in pursuance of an arrangement mentioned in subsection (1) or (2) above shall be disregarded for the purposes of capital gains tax.
(5)The Treasury may provide by regulations that this section, or any provision of it, does not apply unless such conditions as are specified in the regulations are fulfilled; and the conditions may relate to the capacity in which any person involved in any arrangement is acting, the Board's approval of any such person or of the arrangement, the nature of the securities, or otherwise.
(6)This section applies to transfers made after such date as is specified for this purpose by regulations under this section.
(7)In this section "securities" includes stocks and shares.
(8)The power to make regulations under this section shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons.