(1) In computing the amount of -
(a) a person's profits or gains for the purposes of income tax, or
(b) a person's income for the purposes of corporation tax,
arising from a petroleum trade, no deduction shall be made in respect of -
(i) any interest payable by the person to a connected person to the extent that the amount of the interest exceeds for whatever reason the amount which, having regard to all the terms on which the money in respect of which it is payable was borrowed and the standing of the borrower, might have been expected to be payable if the lender and the borrower had been independent parties dealing at arm's length,
(ii) interest payable by the person on any money borrowed to meet expenditure incurred on petroleum exploration activities, or
(iii) interest payable by the person on any money borrowed to meet expenditure incurred in acquiring petroleum rights from a connected person.
(2) Section 130(2)(d)(iv) shall not apply to so much of any interest as -
(a) would but
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