Margin Lending

Margin lending is simply borrowing money to invest and is also commonly known as gearing. Borrowed money can then be invested in a number of ways – direct shares, property, managed funds etc.


Borrowing to increase your investment can be a way of speeding up your wealth creation as by having more money working for you can both accelerate your potential for capital gains (and losses).


Whilst borrowing money to increase your wealth may seem like a contradiction in terms, it can be one of the most powerful strategies available for tax-effective wealth creation.


A margin lending arrangement is one where the lender takes your investment assets as security and has the ability to impose a range of measures if your investment value falls below a set limit; this can include steps such as paying down your loan and either selling or buying investments.


Gearing carries an additional element of risk when compared to un-geared investment, so it’s important to seek professional advice to ascertain whether the strategy is right for you and help put in place appropriate risk management measures to ensure your strategy is sound.