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HMRC internal manual

Business Income Manual

Foreign exchange: gains or losses: capital or revenue: summary

The following guidelines will cover most cases and are intended to ensure consistency of approach.

Period of borrowing Amount of borrowing  
  Fixed Fluctuating
Less than 12 months Revenue Revenue
12 months or longer Capital ‘Use’ test is relevant
Less than 12 months but renewable beyond then Revenue but see BIM39530 Revenue but see BIM39530

These guidelines should be applied flexibly and with common sense, for instance in deciding the nature of a borrowing for a period of less than, or not significantly more than, a year.