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(A) in computing the company’s profits or gains for the purposes of Case I of Schedule D, or

(B) in computing the company’s profits or gains for the purposes of Case V of Schedule D;

“relevant period”, in relation to a loan to which section 247 applies, means the period beginning 2 years before the date of application of the proceeds of the loan and ending on the date of application of the proceeds of the loan.

(ii) Where at any time in the relevant period in relation to a loan to which section 247 applies the investing company recovered any amount of capital from the company concerned, other than a repayment in respect of a specified loan, the investing company shall immediately after the application of the loan to which section 247 applies be treated for the purposes of this section as if the investing company had repaid out of the loan an amount equal to the amount of capital recovered and so that out of the interest otherwise eligible for relief and payable for any period after that time there shall be deducted an amount equal to interest on the amount of capital so recovered, but this subparagraph shall not apply to so much of the capital so recovered as was applied by the investing company—

(ii) Where at any time in the relevant period in relation to a loan to which section 247 applies the investing company recovered any amount of capital from the company concerned, other than a repayment in respect of a specified loan, the investing company shall immediately after the application of the loan to which section 247 applies be treated for the purposes of this section as if the investing company had repaid out of the loan an amount equal to the amount of capital recovered and so that out of the interest otherwise eligible for relief and payable for any period after that time there shall be deducted an amount equal to interest on the amount of capital so recovered, but this subparagraph shall not apply to so much of the capital so recovered as was applied by the investing company—

(I) before the application of the loan to which section 247 applies, in repayment of any other loan to which section 247 applies, or

(I) before the application of the loan to which section 247 applies, in repayment of any other loan to which section 247 applies, or

(II) in accordance with paragraph (a) or (b) of section 247(2);

(iii) Where at any time after the application of the proceeds of the loan to which section 247 applies the investing company—

(b) Where part only of a loan referred to in paragraph (a) fulfils the conditions in section 247 or 248 so as to afford relief for interest on that part, the deduction to be made under this subsection shall be made wholly out of interest on that part.

(aa) (i) Where the company concerned is a company to which section 247(2)(a)(ii) applies referred to in section 247(2)(a)(iii), (iv) or (v), the investing company shall be deemed to have recovered from the company concerned an amount equal to so much of any capital recovered by the company concerned from another company, being a company more than 50 per cent of the ordinary share capital of which was directly owned by the company concerned, as is not applied by the company concerned—

(III) in accordance with paragraph (a) or (b) of section 247(2), or

(IV) in repayment of a loan to which section 247 applies.

(ac)(i) Where the company concerned is a company referred to in section 247(2)(a)(iv), the investing company shall be deemed, subject to subparagraph (iii), to have recovered from the company concerned an amount equal to so much of any capital recovered by an intermediate holding company from another company where—

(II) the amount of capital recovered by the intermediate holding company is applied in accordance with paragraph (a) or (b) of section 247(2),

(III) the amount of capital recovered by the intermediate holding company is applied in the repayment of a loan to which section 247 applies, or

(IV) an intermediate holding company (that is not a company to which subparagraph (i) or (ii) of section 247(2)(bb) applies) transfers all of its assets and liabilities to another intermediate holding company and—

(B) the company concerned, being a company referred to in section 247(2)(a)(iv), continues to hold the same beneficial percentage of stocks, shares or securities of a company referred to in section 247(2)(a)(i) indirectly through one or more intermediate holding companies, and

(B) the company concerned, being a company referred to in section 247(2)(a)(iv), continues to hold the same beneficial percentage of stocks, shares or securities of a company referred to in section 247(2)(a)(i) indirectly through one or more intermediate holding companies, and

(3) Sections 247(3) and 248(2) and subsections (1) and (2) shall apply to a loan referred to in section 247(2)(c) or 248(1)(c) as if such loan and any loan it replaces were one loan, and as if—

(3) Sections 247(3) and 248(2) and subsections (1) and (2) shall apply to a loan referred to in section 247(2)(c) or 248(1)(c) as if such loan and any loan it replaces were one loan, and as if—

(a) references in sections 247(3) and 248(2) and in subsection (1) to the application of the proceeds of the loan were references to the application of the proceeds of the original loan, and

(iv) Where, after the application of the proceeds of a loan to which section 248 applies, the individual has recovered any amount of capital from the company concerned or from a connected company without using that amount in repayment of the loan, the individual shall be treated for the purposes of this section as if the individual had repaid that amount out of the loan and so that out of the interest otherwise eligible for relief and payable for any period after that time there shall be deducted an amount equal to interest on the amount of capital so recovered.

(b) Where part only of a loan referred to in paragraph (a) fulfils the conditions in section 247 or 248 so as to afford relief for interest on that part, the deduction to be made under this subsection shall be made wholly out of interest on that part.

(3) Sections 247(3) and 248(2) and subsections (1) and (2) shall apply to a loan referred to in section 247(2)(c) or 248(1)(c) as if such loan and any loan it replaces were one loan, and as if—

(3) Sections 247(3) and 248(2) and subsections (1) and (2) shall apply to a loan referred to in section 247(2)(c) or 248(1)(c) as if such loan and any loan it replaces were one loan, and as if—

(a) references in sections 247(3) and 248(2) and in subsection (1) to the application of the proceeds of the loan were references to the application of the proceeds of the original loan, and

(II) section 584 is applied or, but for section 626B, would be applied to the exchange by section 586, and

(II) section 584 is applied or, but for section 626B, would be applied to the exchange by section 586, and

(II) section 584 is applied or, but for section 626B, would be applied to the exchange by section 586, and