diff --git a/compiler/src/dotty/tools/dotc/util/SourceFile.scala b/compiler/src/dotty/tools/dotc/util/SourceFile.scala
index 1c264b395689..eb99fe99d926 100644
--- a/compiler/src/dotty/tools/dotc/util/SourceFile.scala
+++ b/compiler/src/dotty/tools/dotc/util/SourceFile.scala
@@ -229,8 +229,7 @@ object SourceFile {
    *  It relies on SourceFile#virtual implementation to create the virtual file.
    */
   def virtual(uri: URI, content: String): SourceFile =
-    val path = Paths.get(uri).toString
-    SourceFile.virtual(path, content)
+    SourceFile(new VirtualFile(Paths.get(uri), content.getBytes(StandardCharsets.UTF_8)), content.toCharArray)
 
   /** Returns the relative path of `source` within the `reference` path
    *
diff --git a/compiler/src/dotty/tools/io/VirtualFile.scala b/compiler/src/dotty/tools/io/VirtualFile.scala
index 6fb9859503f2..404289a6c8cf 100644
--- a/compiler/src/dotty/tools/io/VirtualFile.scala
+++ b/compiler/src/dotty/tools/io/VirtualFile.scala
@@ -40,15 +40,32 @@ class VirtualFile(val name: String, override val path: String) extends AbstractF
     this.content = content
   }
 
+  /**
+    * Initializes this instance with the specified path
+    * and a name taken from the last path element.
+    *
+    * @param path the path of the virtual file to be created
+    * @param content the initial contents of the virtual file
+    * @return     the created virtual file
+    */
+  def this(path: JPath, content: Array[Byte]) = {
+    this(path.toString.replace(java.io.File.separatorChar, '/'), content)
+    this.jpath_ = path
+  }
+
   private var content = Array.emptyByteArray
 
+  private var jpath_ : JPath = null
+
   def absolute: AbstractFile = this
 
   /** Returns null. */
-  def jpath: JPath = null
+  def jpath: JPath = jpath_
 
   override def sizeOption: Option[Int] = Some(content.length)
 
+  override def exists: Boolean = true
+
   def input : InputStream = new ByteArrayInputStream(content)
 
   override def output: OutputStream = {
diff --git a/presentation-compiler-testcases/src/tests/macros/metals7460.scala b/presentation-compiler-testcases/src/tests/macros/metals7460.scala
new file mode 100644
index 000000000000..0b9b1ca494b2
--- /dev/null
+++ b/presentation-compiler-testcases/src/tests/macros/metals7460.scala
@@ -0,0 +1,20 @@
+package tests.macros
+
+import scala.quoted.*
+
+object Macros7460 {
+
+  transparent inline def foo: String =
+    ${ fooImpl }
+
+  private def fooImpl(using Quotes): Expr[String] =
+    Expr("foo...")
+
+  transparent inline def bar: String =
+    ${ barImpl }
+
+  private def barImpl(using Quotes): Expr[String] =
+    quotes.reflect.Position.ofMacroExpansion.sourceFile.getJPath.get // this line is the culprit
+    Expr("bar...")
+
+}
diff --git a/presentation-compiler/test/dotty/tools/pc/tests/hover/HoverTermSuite.scala b/presentation-compiler/test/dotty/tools/pc/tests/hover/HoverTermSuite.scala
index 3f55352804b4..f46a2ba506b9 100644
--- a/presentation-compiler/test/dotty/tools/pc/tests/hover/HoverTermSuite.scala
+++ b/presentation-compiler/test/dotty/tools/pc/tests/hover/HoverTermSuite.scala
@@ -799,3 +799,19 @@ class HoverTermSuite extends BaseHoverSuite:
          |""".stripMargin,
          "def valueOf($name: String): Foo".hover
     )
+
+  @Test def `i7460` =
+    check(
+      """|package tests.macros
+         |def m = Macros7460.foo.sub@@string(2, 4)
+         |""".stripMargin,
+         "def substring(x$0: Int, x$1: Int): String".hover
+    )
+
+  @Test def `i7460-2` =
+    check(
+      """|package tests.macros
+         |def m = Macros7460.bar.sub@@string(2, 4)
+         |""".stripMargin,
+         "def substring(x$0: Int, x$1: Int): String".hover
+    )