Tax deduction of interest on borrowings
Investment books comparing property and share investment often state that interest paid on borrowings used for purchase of shares is tax deductable - just as for rental property. However, I've never seen the principle carried through to any more comprehensive explanation.
My question applies to long term investment rather than trading. The objective would be to build a larger portfolio, for future dividend income, than could be achieved without borrowing. As with property, one could choose a range of approaches from loss making "negative gearing" through to more modest borrowings which could leave some taxable profit after deduction of interest from dividends.
Can anyone provide any practical guidance or comment on the requirements or processes involved in exercising this principle?
Thanks in advance .. Pugs