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margin loan

Discussion in 'Accounting, Tax & Legal' started by navjit6, 4th Mar, 2010.

  1. navjit6

    navjit6 Active Member

    Joined:
    2nd Nov, 2009
    Posts:
    30
    Location:
    Brisbane, QLD
    hi i have a margin loan currently geared at 60%. all the stocks have security ratio of 75%. if i wanted to buy more shares without increasing my gearing ratio. Is it possible to apply for a totally separate personal loan and put this into my margin account, and buy shares with that? will the interest on the personal loan be tax deductible considering that it will be fully used for investment purposes?
     
  2. jrc77

    jrc77 Well-Known Member

    Joined:
    26th May, 2008
    Posts:
    147
    Yes

    Yes (if you were silly enough you could buy shares on a credit card and then claim the interest as deductable).

    The question you should ask is if this is a good idea ... My answer would be personally I wouldn't do it :)
    Regards,

    Jason
     
  3. navjit6

    navjit6 Active Member

    Joined:
    2nd Nov, 2009
    Posts:
    30
    Location:
    Brisbane, QLD
    thanks for that...i know its not ideal but its not too bad. only borrowing 5k and will be able to pay back within 2 months easily. so interest will be less then $100
    if i dont do it this way, and the shares go up then it will end up costing me more. i know they might not go up or be steady...but i think there will be way bigger diff than $100 in 2 months