Interest on borrowings is deductible if you are a share trader.
If you are a share investor you can apply interest expenses to the cost base of the asset. This comes under the 3rd element of cost base. The problem can be how to correctly apportion the interest when a number of assets have been purchased and sold during the year.
You can claim the interest against income derived from the investment even if there is little or no income and a loss situation is created. To do this the investment must have been made with the intention of receiving income (dividends).
If you purchased shares in a company and the company cancelled their dividend payments after your purchase, you could still argue the intention of the purchase was to derive income even though no income was received.
Would be a much harder case to argue if you purchased shares in a spec company that had never paid dividends or even made profits they could pay dividends out off.
