If you think that you can borrow 20k at 3% to buy an ETF that gives you a 2.5% dividend because you already have 10k of that ETF without violating that criteria you are clearly wrong… (“750 total dividend minus 600 interest = +150 mister Taxman”)
I don’t want to sound like I have a lack of humility but I don’t need the tax authorites to confirm what I say on this particular point. I don’t see any “pro-rata” in any way in your uncorrect interpretation,
In the Kreisschreiben pro rata refers to the interest paid (“anteilige Schuldzinsen“). Say if you purchase two different ETF on margin you distribute the total interest paid pro rata on the two ETF and compare against the dividend of you received for the respective ETF. In my understanding you take the total dividend (Wertschrift), there is no mentioning that you need to apply pro rata to calculate the dividend on the portion purchased on margin (note that the Wertschriftenverzeichnis is by position not by transaction). Pro rata is only used to distribute the total interest to individual Wertschriften.
I didn’t say it was by transaction, eventhough my example was worded in a way that one could think I believe that. I am reading the french version btw but it doesn’t look different. I don’t see were it says “by position” and not the entire portfolio.
According to you it would be possible to have 100’000 CHF of X (dividend of 0.51%) and 200’000 CHF of Y (dividend of 0.51%) financed with a loan of 60’000 CHF with an interest of 2.5% ?
But then you would violate the criteria if you have 100’000 CHF of W (dividend of 2.5%), 200’000 CHF of Z (dividend of 3%) and 50 CHF of V (no dividend), financed with a loan of 1’000 CHF (interest of 1.5%) ?
I read it again today and to be honest the exact rules to be applied are not clear at all to me. There can be many complex cases. Say you have 200k capital (cash) take a loan of 200k and then purchase 2 ETF (invest 200k into each). According to the tax rules, which one is funded on margin? Pro rata each? Same example but assume you first purchased ETF 1 (200k), then took a loan (200k) and only then purchased ETF 2 (200k), again how to apply the rules? I’ll try to check with the authorities at some stage as I would like to understand the exact mechanics. Even though I am not leveraged now, I may want to be to bring forward regular ETF purchases in case of a significant market crash.
hi, how was the contact with MoneyPark? could they find a really good deal on the mortgage?
I personally wouldnt recommend them.
They were friendly, helpful, and professional. But since I didn’t go through with the purchase, I couldn’t measure their real worth.
You don’t have anything to lose by going to the first free appointment. Their fees are very reasonable considering what you might save at the end. I think that this is an instance where the saying “It’s expensive to be cheap” applies well.
In my case they couldn’t provide me with a good offer. Their best offer was actually twice the price of one I got by myself.
I know that this depends on the personal case. I’m just writing about my personal experience.
Also, they’ll try to sell you a 3A life insurance. Be careful.