Income Tax Act 2007 section 665

Foreign currency securities: unrealised interest payable in foreign currency

Section 665 sets out how unrealised interest payable in a foreign currency is converted into sterling for the purposes of the accrued income scheme.

• Where unrealised interest on securities is payable in a foreign currency, all amounts must be converted into sterling for accrued income scheme purposes.
• For calculating accrued income profits where the settlement day falls outside the interest period, the unrealised interest is valued at its sterling equivalent on the settlement day.
• For transfers involving unrealised interest in default (including successive transfers), the value of the right to receive that interest on any given day, and any interest actually received, must be converted to sterling at the rate applying on the relevant day.
• All foreign currency to sterling conversions under this section must use the London closing exchange rate for the day in question.