(1)This section applies if—
(a)a loan to which section 398 applies is made to an individual,
(b)the partnership in question (“the old partnership”) is dissolved,
(c)on its dissolution another partnership of which the individual is a member (“the new partnership”) is formed to carry on the whole or part of the undertaking carried on by the old partnership, and
(d)interest payable on the loan for the period ending with the dissolution of the old partnership was eligible for relief (or would have been had any been payable).
(2)This Chapter applies as if the old partnership and the new partnership were the same partnership.
(3)Section 399(5) (salaried partners etc treated as partners) applies for the purposes of subsection (1)(c) as it applies for the purposes of section 399(2).