Income Tax Act 2007 section 564J

Purchase and resale arrangements where return in foreign currency

Section 564J explains how alternative finance return payments under purchase and resale arrangements are handled when those payments are made in a foreign currency rather than sterling, specifically for individuals outside of a trade or property business context.

• This section applies only to individuals (not companies) who receive or make alternative finance return payments in a foreign currency under purchase and resale arrangements.
• The arrangements must not be connected with a trade, profession, vocation or property business.
• The key calculations — the excess amount and the appropriate amount used to determine taxable returns under section 564I — must be worked out in the foreign currency, not in sterling.
• Each payment of alternative finance return is then converted into sterling using the spot exchange rate on the day the payment is actually made.