One is going to pay income tax on the sale of those equities too in order to generate income annually off of that portfolio.
Nios,
Assume
- you had held the shares you were drawing down for more than 3 years
- you are drawing down R320k pa.
- no other income
Taxable income = (320 -30) /3 = 96 k pa.
Tax payable is approx R6000 pa less deductions.
Correct me if I'm wrong, but isn't it actually better than that? Because you didn't get the shares to sell for free they obviously had a cost price. Let's say you bought them for R100k:
Taxable income = (320 -100 -30) /3 = 57 k pa.
Tax payable is approx R0 pa less deductions.