Subject to the conditions in BIM45155 - BIM45160, ICTA88/S84 (3) for corporation tax, S108(2) ITTOIA for income taxprovides that no trading receipt is to be treated as arising, for tax purposes, on the gift. The effect is that the trader obtains full relief for the cost of acquisition or manufacture of the article in question. This overrides the principle derived from case law that when an item of trading stock is disposed of other than by way of trade, the amount that would have been received if the item had been sold in the ordinary way (the market value) should be included as a trading receipt for tax purposes (Sharkey v Wernher [1955] 36TC275).
