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Messages - Orca

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1936
Shares / Re: Living off Dividends.
« on: September 27, 2013, 06:18:09 pm »
Now that first calculation was based on R350k withdrawals py. As you age, the less you spend. If I were to stay in SA then my circumstances would warrant a R18 000 pm withdrawal or R216 000 py. The divies will be an extra bonus.

Started with R667K and made 200% gains then retired. You will now have R2m.

The R667K bought you 20 000 shares in ABC.

R667 000.00/20 000 = Base Cost of R33.35 ps

Now your R2m will have a market value of R2m/20 000 shares = R100

Sell 2160 shares at R100 ps = R216 000

Cost price of 2160 shares at R33.35 = R72 036

Gain is R216 000 - R72 036 = R143 964

Tax = R14 474

Older than 65.

Tax = R8 084

From this you can deduct internet costs, a portion of your laptop cost and medical expenses. So on R18K pm plus divies you will pay less than R1 000 pm tax.

1937
Shares / Re: Living off Dividends.
« on: September 27, 2013, 05:42:33 pm »
The fact that if you are withdrawing money other than divies monthly as an Income then it is INCOME. You will be taxed as Income revenue and not CGT. You are holding your shares for income.
SARS will ask you this. "What is your intention for holding these shares" What will your answer be? For income.

1938
Shares / Re: Living off Dividends.
« on: September 27, 2013, 11:32:20 am »
Quote from: Orca on September 26, 2013, 06:05:55 pm
To make things more clear to me I did this math. (yossa must be looking at my account)

Started with R667K and made 200% gains then retired. You will now have R2m.

The R667K bought you 20 000 shares in ABC.

R667 000.00/20 000 = Base Cost of R33.35 ps

Now your R2m will have a market value of R2m/20 000 shares = R100 ps

You sell 3 500 shares at R100 ps = R350 000.00

Cost of 3 500 shares = R33.35  x 3 500 = R116 725.00

Your Gain is R350 000.00 - R116 725.00 = R233 275.00

Less Exclusion amount of R30 000.00 = R203 275.00

CGT at 33.3% of R203 275.00 = R67 690.60

This will be your Taxable income.

Whoopy. Portugal has CGT of 25%

Well, that now sadly changes this. I used the tax calculator at  http://yourtax.co.za/tax-calculator/2014/ that deducts the rebate that yossa corrected me on.


Gain = R233 275
Tax = R34 647

Not too bad considering that normal tax on your R350 000 would have been R70 060

Older that 65 then tax = R27 897

1939
Shares / Re: Living off Dividends.
« on: September 26, 2013, 08:18:31 pm »
Just as I thought. All your withdrawals will be Income and taxed as such.  :'(

1940
Shares / Re: Living off Dividends.
« on: September 26, 2013, 08:02:20 pm »
Pretty spot on yossa. Now I wonder if that Taxable R67 690.60 can be reduced by the rebate of R12 080.00 plus the 7.5% Medical expenses plus other expenses.
If so, then one could go much higher than R350k py and pay no tax.
I have not yet read your link but I'm sure SARS will have covered this and make you pay 100% of your gains as income.

 

1941
Shares / Re: Living off Dividends.
« on: September 26, 2013, 06:05:55 pm »
To make things more clear to me I did this math. (yossa must be looking at my account)

Started with R667K and made 200% gains then retired. You will now have R2m.

The R667K bought you 20 000 shares in ABC.

R667 000.00/20 000 = Base Cost of R33.35 ps

Now your R2m will have a market value of R2m/20 000 shares = R100 ps

You sell 3 500 shares at R100 ps = R350 000.00

Cost of 3 500 shares = R33.35  x 3 500 = R116 725.00

Your Gain is R350 000.00 - R116 725.00 = R233 275.00

Less Exclusion amount of R30 000.00 = R203 275.00

CGT at 33.3% of R203 275.00 = R67 690.60

This will be your Taxable income.

Whoopy. Portugal has CGT of 25%





1942
Shares / Re: Living off Dividends.
« on: September 26, 2013, 04:03:25 pm »
Good one yossa. I will play with it tomorrow. My concern is that even if you keep your shares for years but sell portions monthly, will SARS not regard it as income and not CGT?

1943
Shares / Re: Oceana Group Ltd
« on: September 25, 2013, 03:10:10 pm »
Strange how your fishies and my computers seem to follow one another. Plus both bounced off the 200sma on the same day and on the same level. Only thing I know they have in common is net working.  :LHST:

1944
Shares / Re: Living off Dividends.
« on: September 25, 2013, 11:11:24 am »
Very interesting. Makes me wonder which one will be more tax efficient if one has to make monthly withdrawals for retirement. More divies. Less tax.

1945
Shares / Living off Dividends.
« on: September 24, 2013, 08:15:20 pm »
We all know that divies are almost tax free but to live off the divies alone is almost out of our reach as one would need at least R2.3m in high divi stocks to actually earn enough.
One site that I found stated that they only invest in high divi Co's and do a great 100% in Divies over an 8 year period. This equates to 12.5% pa on Divies alone.
My R2.3m will give you R24K pm less the tax.
Now I have not checked but wonder how STXDIV performs to my calculation above.

1946
The Investor Challenge / Re: Blog post: The only way to get rich.
« on: September 23, 2013, 08:59:24 pm »
You should post them somewhere where you can make money. Can't think where but well done.  :TU:

I would never add bonds and cash into my portfolio as they are a ballast to my flight upwards. As are RA's and other Micky Mouse stuff. Equities have long been and proven to outperform everything else over years. So I would go for 100% Indi. Perhaps add some Rafi.

Going for divi ETF alone warrants massive capital to make a living off it. 

1947
Shares / Re: CML
« on: September 23, 2013, 07:58:27 pm »
Oops. Forgot to add that the results will be out in November and the 200sma will have gone up some. Perhaps to 6000 at most. Depending if it flattens.

1948
Shares / Re: CML
« on: September 23, 2013, 07:39:35 pm »
If Immobilier and gcr will allow me, I will post this chart. CML is at the end of her FY earnings. If the results are lower than expected then here is the support she will be headed to. That will be -18%. Not too bad and will be a good correction for her PE ratio to normalize.

1949
The Investor Challenge / Re: investor challenge
« on: September 23, 2013, 05:53:06 pm »
Quote from: jaDEB on September 23, 2013, 04:00:05 pm
If you keep it Orca, how long do you need to keep it before you do not pay tax?

You will always pay tax jaDEB. If you sell before the 3 year holding term, all your gains are added to your income. If you sell after the 3 year term, 33.3% of your gains are added to your income.

The mystery is this. According to SARS website, if you were classed as a trader by selling and buying before the 3 year term then hold for 10 years then your stocks are still regarded as trading stock and will be taxed accordingly.

To change your stocks to long term Capital Assets, you need to "regard" your stocks as "sold" even if you don't sell them and pay the tax due at 100% of the gains added to your income. Your Base cost will then be at the market value at the end of that day. (I presume)
Problem now is that if you were a Trader and then changed your intention to be an investor, you would have sold the stocks prior to this anyway and paid the tax, then this date of new purchase should be the start of the 3year holding period in my view but unfortunately SARS is not clear on this.

Hope you get what I mean.








1950
The Investor Challenge / Re: Blog post: The only way to get rich.
« on: September 23, 2013, 05:18:46 pm »
A good, well written article. Did you copy that or write it yourself Patrick?

What Index funds do you have in mind?

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