Potential tax benefits

Borrowing money against an existing portfolio or asset in order to invest can not only improve investment returns but can also offer attractive tax advantages. Seek financial advice to find out your options.

Margin lending can be highly tax-effective

Negative gearing

There may be tax benefits from negative gearing. Your margin loan is negatively geared when the interest rate on your loan is higher than the income from the investment. Negative gearing may reduce tax by claiming investment losses.

Consider the interest

The interest you pay on a margin loan may be tax-deductible.

Your loan structure

You can arrange a margin loan that suits your tax planning - as an individual, as joint investors, as a third party, or as a company or trust structure.

If you invest as an individual, you may benefit from lower effective tax rates on capital gains.

Timing your repayments

You can pre-pay all or part of your loan at a time that best suits your tax situation. By pre-paying your interest for a maximum of 12 months, you can bring tax deductions forward provided that you maintain the loan for the same purpose for the pre-paid timeframe.

Third party security

You can take out a loan secured against a third party's portfolio. This allows a person in a higher tax bracket to take out a loan against the portfolio of a person in a lower tax bracket (who cannot fully use the tax deduction available).

Borrowing against your loan

You may be able to borrow against an existing portfolio of shares and managed funds, increasing your investment amount without having to sell your portfolio and incur capital gains tax.

Find out more about BT's margin lending.

Download a copy of 'Margin lending made easy' (PDF, 557 KB).
Read BT's margin lending case studies.
Find a financial adviser using BT's Adviser Referral Program.
Learn about BT's margin loans.