Part 8Other reliefs

Chapter 1Interest payments

General and supplementary

410Other business successions and reorganisations

1

This subsection applies if—

a

a loan to which one of the business loan provisions or section 398 (loan to invest in partnership) applies is made to an individual (“the original loan”),

b

the company, partnership or co-operative in question is involved in a transaction as a result of which the individual acquires shares in or makes a loan to another company or a body that is a co-operative,

c

interest payable on the original loan for the period ending with the time of the transaction was eligible for relief (or would have been had any been payable), and

d

had the original loan been made at the time of the transaction and applied in acquiring the shares in or making the loan to the other company or the co-operative, the original loan would have fallen within one of the business loan provisions.

2

If subsection (1) applies, from the time of the transaction referred to in subsection (1)(b) the original loan is treated as if it had been made and applied as mentioned in subsection (1)(d).

3

In this section “the business loan provisions” means—

a

section 392 (loan to buy interest in close company),

b

section 396 (loan to buy interest in employee-controlled company), and

c

section 401 (loan to invest in co-operative).