BIM39540 | Foreign exchange: gains or losses: capital or revenue: summary
From HM Revenue & Customs · Business Income Manual
The following guidelines will cover most cases and are intended to ensure consistency of approach.
| Period of borrowing | Amount of borrowing - Fixed | Amount of borrowing - 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 | Revenue but see |
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.