Thanks all. Bookworm, you get the prize for actually knowing what the current law is
And NB as you say, SERA.5005(f) itself doesn't mention "in accordance with normal aviation practice", and the CAA exemptions only apply that proviso in relation to practising landings at an aerodrome, PFLs, or "flying in accordance with a notified procedure". So the question of whether you're flying "in accordance with normal aviation practice" doesn't apply if all you're doing is a take-off, or an approach to a full-stop landing.
Which brings me back to the question of how far out the 500ft exemption extends - if there's a hill under the downwind do you have to clear it by 500ft or is it covered by the exemption that it's "necessary for take-off or landing".
From what you say bookworm and legalapproach, that's not a question that's been settled in the courts. I've looked at the lists of CAA prosecutions but none of them are detailed enough to answer the question.