Thanks guys, I hadn't heard of the Canvas To Layer function before. After a bit of digging I've got it working using this code:
-> inventoryItem: Set position to (CanvasToLayerX("UI", LayerToCanvasX("Characters", inventoryItem.X, inventoryItem.Y), LayerToCanvasY("Characters", inventoryItem.X, inventoryItem.Y)), CanvasToLayerY("UI", LayerToCanvasX("Characters", inventoryItem.X, inventoryItem.Y), LayerToCanvasY("Characters", inventoryItem.X, inventoryItem.Y)))
-> inventoryItem: Move to layer "UI"