The first question you have to answer. Are you considered to be a trader or an investor?
That will then determine if you are using capital account as opposed to trading account as you can only offsetcapital gains against capital losses or as a trader using the trading account & offseting expenses against income (income being trading profits), as you are seen as a business.
There are certain thresholds to be met to be considered a trader. I believe that the interest is then considered a cost of doing business (if you are a trader then the 12 month period for 50% reduction on capital gains no longer applies) as all trading (if profitable) is considered 'income' and you are taxed accordingly after expenses (depreciation, internet, trading fees etc).
Generally, if you are an investor then the interest component can be offset against the dividend (income) stream. I am unsure if this can be done if it is reasonable to expect a maiden dividend to be paid where it has not been gazetted by the company.
There are a lot of other combinations that can come into play, I suggest speaking to your accountant on a regular basis to ensure you are not giving yourself a hair cut.
Any accountants out there?
All in my opinion only..
M
SDL Price at posting:
47.0¢ Sentiment: Hold Disclosure: Held
