151(1)  This section applies for the purpose of calculating the profits of a trade if–

(a)the person carrying it on (“the trader”) exchanges a gilt-edged security for strips of the security, and

(b)a profit on the sale of the security would be brought into account in calculating the profits of the trade.

151(2)  The security is treated as having been redeemed at the time of the exchange by the payment to the trader of its market value.

151(3)  The trader is treated as having acquired each strip for the proportion of the market value of the security given by the following fraction.

151(4)  The fraction is–

SV
TV

where–

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