(1)An instrument on which stamp duty is not chargeable by virtue of—
(a)section 127(1) of the [1976 c. 40.] Finance Act 1976 (transfer to stock exchange nominee), or
(b)section 84(2) or (3) above,
shall be disregarded in construing section 87(4) and (5) above.
(2)Subsection (3) below applies where the chargeable securities mentioned in section 87(1) above are constituted by or transferable by means of an inland bearer instrument, within the meaning of the heading "Bearer Instrument" in Schedule 1 to the Stamp Act 1891, which—
(a)is exempt from stamp duty under that heading by virtue of exemption 3 in that heading, or
(b)would be so exempt if it were otherwise chargeable under that heading.
(3)In such a case section 87 above shall have effect as if the following were omitted—
(a)in subsection (2) the words from "unless" to the end;
(b)subsections (4), (5) and (8).