Does margin loan interest get tax relief in the UK?
No relief applies to interest on a loan to buy a general portfolio of shares or funds. Section 383 of the Income Tax Act 2007 gives relief only for the listed kinds of loan, and that is not one of them. The interest is not taken off your gain either: section 38(3) of the Taxation of Chargeable Gains Act 1992 says no payment of interest is allowable in working out a gain, with an exception in section 40 that this page does not cover. This calculator therefore shows £0.00 of relief and charges capital gains tax on the gain only.
This page is for an individual investor. Rules for loans from an employer or a company, such as benefit in kind or section 455, are about a different kind of loan and are not covered.
How the cost and the tax are worked out
Interest is the balance times the annual rate times the days borrowed, divided by 365 or 360 depending on your lender's agreement. Capital gains tax is the part of your gain above the annual exempt amount multiplied by your rate. The calculator then shows your profit after interest and tax, or the loss if the interest is bigger than the gain, and the gain you need just to cover the interest after capital gains tax.
Both tax figures are yours to set. At the time of writing gov.uk shows capital gains tax of 18% within the basic rate band and 24% above it for gains from 6 April 2026, and uses a £3,000 annual exempt amount in its examples for 2026 to 2027. The calculator starts with 24% and £3,000 as examples. Check gov.uk for the tax year in which you sell, and change them if they differ.
Worked example: a gain
A £50,000 margin loan at 8% for 90 days on a 365-day basis costs £986.30 in interest, or £10.96 a day. With a £10,000 gain, a £3,000 exempt amount and a 24% rate, £7,000 is taxable and the capital gains tax is £1,680.00. Your profit after interest and tax is £7,333.70. The gain needed to cover the interest is £986.30, which is below the exempt amount, so no capital gains tax arises on it.
Worked example: when the interest is large
A £200,000 loan at 8% for 365 days costs £16,000.00 in interest. Against a £400,000 portfolio with a £40,000 gain, £37,000 is taxable and the capital gains tax is £8,880.00, leaving a profit of £15,120.00 after interest and tax. Because the interest is above the exempt amount, the gain needed to cover it after tax is £20,105.26, which is 5.03% of the portfolio.
Worked example: no gain, and the day count
With no gain, the £50,000 loan above still costs £986.30, so the result is a loss of £986.30. On a 360-day basis the same loan costs £1,000.00.
The margin call level
If your lender needs equity of at least 30% of the portfolio, a margin call happens when the portfolio falls to the loan divided by 70%. For a £50,000 loan that is £71,428.57. A £100,000 portfolio is £28,571.43 above that level, so a fall of 28.57% would trigger a call, and your equity today is 50.00% of the portfolio.
Lenders set their own maintenance requirements, so enter the figure in your agreement and treat the result as a guide. If your portfolio is already below the call level the calculator shows how far short it is.
Inputs for the margin loan tax calculator
Days in the interest year
The divisor for the daily rate, 365 or 360. Your lender's agreement says which.
Margin loan balance, rate and days borrowed
The amount you owe, the yearly rate and the days the balance was outstanding.
Portfolio value and maintenance margin
Used for the margin call level. The maintenance margin is the minimum equity share your lender requires.
Gain, capital gains tax rate and annual exempt amount
The gain you expect on the portfolio, your rate and the exempt amount. Look up the rate and amount at gov.uk for the year you sell.
CALCULATOR QUESTIONS
UK margin loan tax calculator questions
Can I claim tax relief on margin loan interest in the UK?
Not for a loan to buy a general portfolio. The relief in section 383 of the Income Tax Act 2007 covers only the kinds of loan it lists, and capital gains rules allow no interest against a gain.
Is margin loan interest deducted from my capital gain?
No. Section 38(3) of the Taxation of Chargeable Gains Act 1992 says no payment of interest is allowable, so the interest stays a cost on top of the tax.
Which capital gains tax rate should I enter?
The rate that applies to your gain in the tax year you sell, which depends on your income. Check gov.uk. The calculator starts with 24% as an example only.
What if my portfolio loses value?
Enter a gain of 0 and the result is a loss equal to the interest. A fall in value is also what triggers a margin call, so check the call level.
What does a margin call mean?
Your lender asks you to add cash or securities because your equity has fallen below its maintenance requirement. Read your agreement for what happens if you do not.