816. Gifts and other bargains not at arm's length treated as made at market value.

A person's acquisition or disposal of an asset is deemed to be for a consideration equal to the market value1 where:

  1.  

    (1)     he acquires or disposes of it otherwise than by way of a bargain at arm's length2 and in particular if the acquisition or disposal is:

    1.  

      (a)     by way of gift;

    2.  

      (b)     on a transfer into settlement by a settlor3; or

    3.  

      (c)     by way of a distribution4 from a company in respect of shares in the company5; or

  2.  

    (2)     he acquires or, as the case may be, disposes of it:

    1.  

      (a)     wholly or partly for a consideration that