Section 61: Non-recognition of gain or loss.

(1) No gain or loss is taken into account in determining chargeable income on—a) a transfer of an asset between spouses; b) a transfer of an asset between former spouses as part of a divorce settlement or bona fide separation agreement; or c) a disposal of a business asset where and to the extent that consideration in excess of the adjusted cost base of the asset is invested in an asset of a like kind within one year of the disposal. (2) Where no gain or loss is taken into account pursuant to paragraph (a) or (b) of subsection (1), the transferee is deemed to have acquired the transferred asset for consideration equal to the adjusted cost base of the transferor. (3) Where an asset is reacquired within twelve months of its disposal— a) any gain assessed shall be reduced by the extent to which the cost of reacquisition exceeds the adjusted cost base of the asset, but not so as to create a loss; b) any loss relief given shall be withdrawn; c) any net loss on the sale and repurchase of the asset shall be added to its adjusted cost base; and d) any net gain on the sale and repurchase of the asset exceeding the gain to be assessed before repurchase shall be deducted from its adjusted cost base. (4) In the case of a business asset in which proceeds of disposal of another asset have been reinvested, the cost base of the replacement asset is the cost of that asset less the excess referred to in paragraph (c) of subsection (1). MISCELLANEOUS P RINCIPLES FOR D ETERMINING C HARGEABLE I NCOME