diff --git a/src/xen/xend_internal.c b/src/xen/xend_internal.c
index 835c230..e112aa3 100644
--- a/src/xen/xend_internal.c
+++ b/src/xen/xend_internal.c
@@ -903,7 +903,6 @@ xenDaemonListDomainsOld(virConnectPtr xend)
  *
  * Returns 0 for success, -1 (with errno) on error
  */
-
 int
 xenDaemonDomainCreateXML(virConnectPtr xend, const char *sexpr)
 {
@@ -2148,7 +2147,6 @@ xenDaemonParseSxpr(virConnectPtr conn,
     } else
         def->onCrash = VIR_DOMAIN_LIFECYCLE_DESTROY;
 
-    def->clock.offset = VIR_DOMAIN_CLOCK_OFFSET_UTC;
     if (hvm) {
         if (sexpr_int(root, "domain/image/hvm/acpi"))
             def->features |= (1 << VIR_DOMAIN_FEATURE_ACPI);
@@ -2157,15 +2155,18 @@ xenDaemonParseSxpr(virConnectPtr conn,
         if (sexpr_int(root, "domain/image/hvm/pae"))
             def->features |= (1 << VIR_DOMAIN_FEATURE_PAE);
 
-        /* Old XenD only allows localtime here for HVM */
-        if (sexpr_int(root, "domain/image/hvm/localtime"))
+        def->clock.offset = VIR_DOMAIN_CLOCK_OFFSET_VARIABLE;
+        def->clock.data.adjustment = sexpr_int(root, "domain/image/hvm/rtc_timeoffset");
+        if (def->clock.data.adjustment && sexpr_int(root, "domain/image/hvm/localtime")) {
+            virXendError(VIR_ERR_INTERNAL_ERROR, _("Ignoring localtime=1 while rtc_timeoffset!=0"));
+        }
+    } else { /* !hvm */
+        if (sexpr_int(root, "domain/image/linux/localtime"))
             def->clock.offset = VIR_DOMAIN_CLOCK_OFFSET_LOCALTIME;
+        else
+            def->clock.offset = VIR_DOMAIN_CLOCK_OFFSET_UTC;
     }
 
-    /* Current XenD allows localtime here, for PV and HVM */
-    if (sexpr_int(root, "domain/localtime"))
-        def->clock.offset = VIR_DOMAIN_CLOCK_OFFSET_LOCALTIME;
-
     if (sexpr_node_copy(root, hvm ?
                         "domain/image/hvm/device_model" :
                         "domain/image/linux/device_model",
@@ -5759,31 +5760,15 @@ xenDaemonFormatSxpr(virConnectPtr conn,
     }
     virBufferVSprintf(&buf, "(on_crash '%s')", tmp);
 
-    /* Set localtime here for current XenD (both PV & HVM) */
-    if (def->clock.offset == VIR_DOMAIN_CLOCK_OFFSET_LOCALTIME) {
-        if (def->clock.data.timezone) {
-            virXendError(VIR_ERR_CONFIG_UNSUPPORTED,
-                         "%s", _("configurable timezones are not supported"));
-            goto error;
-        }
+    if (STREQ(def->os.type, "hvm"))
+        hvm = 1;
 
-        virBufferAddLit(&buf, "(localtime 1)");
-    } else if (def->clock.offset != VIR_DOMAIN_CLOCK_OFFSET_UTC) {
-        virXendError(VIR_ERR_CONFIG_UNSUPPORTED,
-                     _("unsupported clock offset '%s'"),
-                     virDomainClockOffsetTypeToString(def->clock.offset));
-        goto error;
-    }
+    if (hvm)
+        virBufferAddLit(&buf, "(image (hvm ");
+    else
+        virBufferAddLit(&buf, "(image (linux ");
 
     if (!def->os.bootloader) {
-        if (STREQ(def->os.type, "hvm"))
-            hvm = 1;
-
-        if (hvm)
-            virBufferAddLit(&buf, "(image (hvm ");
-        else
-            virBufferAddLit(&buf, "(image (linux ");
-
         if (hvm &&
             def->os.loader == NULL) {
             virXendError(VIR_ERR_INTERNAL_ERROR,
@@ -5893,17 +5878,13 @@ xenDaemonFormatSxpr(virConnectPtr conn,
                 virBufferAddLit(&buf, "(serial none)");
             }
 
-            /* Set localtime here to keep old XenD happy for HVM */
-            if (def->clock.offset == VIR_DOMAIN_CLOCK_OFFSET_LOCALTIME)
-                virBufferAddLit(&buf, "(localtime 1)");
-
             if (def->sounds) {
                 virBufferAddLit(&buf, "(soundhw '");
                 if (xenDaemonFormatSxprSound(def, &buf) < 0)
                     goto error;
                 virBufferAddLit(&buf, "')");
             }
-        }
+        } /* hvm */
 
         /* get the device emulation model */
         if (def->emulator && (hvm || xendConfigVersion >= 3))
@@ -5918,10 +5899,37 @@ xenDaemonFormatSxpr(virConnectPtr conn,
                                                &buf, xendConfigVersion) < 0)
                 goto error;
         }
+    } /* os.bootloader */
+
+    if (hvm) {
+        /* Set localtime here to keep old XenD happy for HVM */
+        if (def->clock.offset == VIR_DOMAIN_CLOCK_OFFSET_VARIABLE) {
+            virBufferVSprintf(&buf, "(localtime 0)(rtc_timeoffset %d)", def->clock.data.adjustment);
+        } else if (def->clock.offset == VIR_DOMAIN_CLOCK_OFFSET_LOCALTIME) {
+            if (def->clock.data.timezone) {
+                virXendError(VIR_ERR_CONFIG_UNSUPPORTED,
+                             "%s", _("configurable timezones are not supported"));
+                goto error;
+            }
 
-        virBufferAddLit(&buf, "))");
+            virBufferAddLit(&buf, "(localtime 1)(rtc_timeoffset 0)");
+        } else if (def->clock.offset == VIR_DOMAIN_CLOCK_OFFSET_UTC) {
+            virBufferAddLit(&buf, "(localtime 0)(rtc_timeoffset 0)");
+        } else {
+            virXendError(VIR_ERR_CONFIG_UNSUPPORTED,
+                         _("unsupported clock offset '%s'"),
+                         virDomainClockOffsetTypeToString(def->clock.offset));
+            goto error;
+        }
+    } else { /* !hvm */
+        if (def->clock.offset == VIR_DOMAIN_CLOCK_OFFSET_LOCALTIME)
+            virBufferAddLit(&buf, "(localtime 1)");
+        else if (def->clock.offset == VIR_DOMAIN_CLOCK_OFFSET_UTC)
+            virBufferAddLit(&buf, "(localtime 0)");
     }
 
+    virBufferAddLit(&buf, "))"); /* image/{kvm,linux}/ */
+
     for (i = 0 ; i < def->ndisks ; i++)
         if (xenDaemonFormatSxprDisk(conn, def->disks[i],
                                     &buf, hvm, xendConfigVersion, 0) < 0)