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Shares / Re: Wait. ETF sales are ALWAYS taxed as CGT?
« on: December 03, 2015, 10:17:52 am »I'm confused, as at the end he says "This final, taxable amount, is what is added to your taxable income and taxed at your current rate.".Are you confusing capital gains with dividends tax? Dividends are taxed at 15%
I thought CGT is 15%, so why is he mentioning current tax rate??
The first R30 000 capital gain is completely tax free. After that, one third of the amount is considered to be income. So if you make a capital gain of R300k, you subtract R30k to get R270k, then divide by three to get R90k. That R90k is added to your annual income, and taxed according to the tax tables for your total income. If you had no other income (dividends don't count), then you'll only pay tax as if you earned R90k that year, which works out to R2943 in annual taxes. That means that by living on R300k capital gains per year, you get to keep R297k. Not a bad deal.
Now on to the original topic, it's the first I've heard. If true I'll be happy and sad. Sad because this year I planned to use a trading loss on an ETF to cancel out three times as much capital gains on a unit trust. But going forward, it'll be favourable for me. Has anyone recent sold an ETF for a profit that was held for less than 3 years? How did your tax look for the year?
