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 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.