Tax-aware liquidity: borrowing instead of selling

When a shareholder sells listed shares, most tax systems treat the transaction as a disposal for capital gains purposes. The gain — the difference between the sale proceeds and the original acquisition cost — is brought into the tax computation for the year of disposal. For shareholders who have held a position for many years, or who received shares at a very low base cost through inheritance or founding-stage participation, the resulting tax liability can be substantial. This liability does not arise from wealth — it arises from the act of realisation. A shareholder with significant paper gains may be highly illiquid in cash terms, yet face a large tax bill the moment they convert those gains into spendable currency.

In some jurisdictions, interest paid on a loan secured against investment assets may be deductible against investment income or other qualifying income. Whether this applies — and to what extent — depends on the borrower’s tax residence, the nature of the underlying asset, the use of the loan proceeds, and the relevant domestic tax rules. Borrowers should not assume deductibility without specific advice from a qualified tax adviser in their jurisdiction. Black Haven does not provide tax advice, and the structure of a facility should be reviewed from a tax perspective by the borrower’s own advisers before drawdown.

Black Haven is a principal lender, not a tax adviser, and the foregoing is for general information only — it does not constitute tax advice and should not be relied upon as such. Tax treatment depends on each borrower’s jurisdiction, personal circumstances, and the advice of their own qualified professionals. What Black Haven can offer is a flexible, discreet financing structure — agreed directly with the borrower without intermediaries — that can accommodate the timelines and documentation requirements that tax-sensitive transactions often involve. We work alongside the borrower’s legal and tax advisers to ensure that facility execution aligns with the broader planning structure.