Revenue Precedents

Does a transfer of stock at a grossly inflated price come within the provisions of Section 89(2)(a)? In order for a transaction to come within this provision the purchaser must be entitled to deduct the cost in computing his/her trading profits. Where the value at which stock is transferred does not come within the realms of being a bona fide transaction the purchaser would not be entitled to a deduction for such cost. IT953552

Natural love and affection does not constitute “valuable consideration” for the purposes of this section. IT953557