Section 248 of the Principal Act is amended -

(a) in subsection (1)(a), by substituting, as respects a loan which is made after 7 December 2005, the following for subparagraph (i):

"(i) a company which exists wholly or mainly for the purpose of carrying on a trade or trades, or",

and

(b) by inserting the following after subsection (1):

"(1A) Subsection (1)(c) shall not apply to a loan made after 7 December 2005 which is applied in paying off another loan applied in acquiring ordinary share capital in, or making a loan to, a company whose income consists wholly or mainly of profits or gains chargeable under Case V of Schedule D unless -

(a) the loan does not exceed the balance outstanding on, and

(b) the term of the loan does not exceed the balance of the term of, the loan being paid off.".