Income Tax Act 2007 section 664

Foreign currency securities: sterling equivalent of payments on transfers

Section 664 sets out how to convert into sterling the deemed payments arising on transfers of securities where interest is payable in a foreign currency, as part of the accrued income scheme.

• When securities pay interest in a foreign currency, any deemed payment on transfer must be converted to a sterling equivalent using the rules in this section.
• Where the transfer agreement separately accounts for interest and states a sterling equivalent, that stated amount is used as the deemed payment.
• Where the transfer agreement separately accounts for interest but does not state a sterling equivalent, the conversion is made at the London closing exchange rate on the settlement day.
• For all other deemed payments (except those relating to interest in default), the sterling equivalent is also calculated using the London closing exchange rate on the settlement day.