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1
Shares / Re: Selling your shares after 3 years.
« Last post by andre on Today at 04:49:34 pm »
Thanks that sort of confirms my thinking.  8)
This is something to ponder though:
Quote
In my case where I was living off my investments from year 1, I had to pay normal income tax and not CGT until my 3 year holding term was reached then it converted to CGT. My effective tax was about 30%.
Ideally one should not draw income from selling equity for the first 3 years if in any way possible - UNLESS the

So in the example above Johnny will pay tax as follows:
Taxable Income on R120k @ 18% = R21 600 minus primary rebate R13 635 = R7 965
plus DWT @ 20% (assuming locally taxed) = R10k
Income from sale of equity = R82k with a base cost of R75k results in a capital gain of 7k which is covered by the exclusion. If it's deemed to be revenue this gain will be added to the taxable income and taxed accordingly at marginal rate - in this case still 18%.
So assuming the CGT exclusion is allowed then the total tax bill will be  R17 965

If the dividends were of foreign nature there's might be an exclusion ratio of 25/45 applicable which exempts a portion of the dividends from tax which could potentially reduce the total tax to R11 965


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Off topic / Live chat
« Last post by Pyr1minal on Today at 03:59:11 pm »
transpaco
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Shares / Re: Selling your shares after 3 years.
« Last post by Orca on Today at 02:54:07 pm »
If held as capital under 9C--- Any sales that have a capital gain, R40k will be deducted by the system as an exclusion and 33.33% of the remainder will be added to your other income and taxed at your margin. The effective tax on your investments would be about 18%.

In my case where I was living off my investments from year 1, I had to pay normal income tax and not CGT until my 3 year holding term was reached then it converted to CGT. My effective tax was about 30%.

Tax on dividends are not calculated by you as it is a withholding tax. This may vary depending on the amount of foreign dividends. Local dividends have a withholding tax of 20% for 2018 tax year.
The "Comprehensive Guide To Capital Gains Tax" is a good read if you have a company or are a SA emigrant with SA investments.
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Off topic / Live chat
« Last post by letlhogonolo on Today at 01:58:52 pm »
Could bitcoin realistically disrupt Gold. That's what the proponents argue. That it's an alternative to Gold
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Shares / Re: Selling your shares after 3 years.
« Last post by andre on Today at 10:24:50 am »
I had to go read up on Section 9C thing a bit and found a summation:

What section 9C does is to remove any uncertainty as to whether or not the proceeds from the sale (for example) of shares are capital or revenue in nature.  If shares that have been owned for at least three years are sold, irrespective of whether the intention upon acquisition was for investment of speculative purposes, the proceeds will be capital in nature and subject to capital gains tax.

So the question is what happens if I sell off a bit of equity EVERY year - will it be deemed capital or revenue in nature by default and what would be the preference if you fall into a low-income bracket? Guess I'll have to work my way through the "Comprehensive Guide To Capital Gains Tax" eventually.  :o
How about an example:
Johnny needs 20k per month i.e. 240k pa. from year 1
He receives an income from rental property (after expenses) of R120k pa
Additionally, he has a 2.5m capital invested in ETFs - yielding 2% dividends and (he hopes) will see 8% in return.
He thus receives R50k pa in dividends and make up the rest (R82k) by drawing down on the capital.

How would his tax situation look?




 





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Shares / Re: student advice needed
« Last post by Patrick on Today at 10:17:37 am »
Interesting project, basically you're trying to do the same thing that every fund manager tries to do. Most fail relative to the market given enough time.

Is your course mark based on showing out-performance, or is it on how you execute the process and what you learn from it?
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Shares / Re: student advice needed
« Last post by Nathan1014 on Today at 09:43:09 am »
Thank you very much for the reply it was very helpful. Will n keeping most if the investments within the JSE top  40 and then will ya a few wildcard stocks with betterbpeg ratios  and Comp that at stable in nature.
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Shares / Re: student advice needed
« Last post by Moneypenny on Today at 08:34:52 am »
Apparently I like this assignment :D

Short term ‘investing’ – or better known as ‘trading’-strategies. - Not written in stone, just what I've noticed.

When world markets down/recession – Go for resources, mining (except when annual strikes take place- coincide just before union voting :wtf: usually around Sep - wonder why)
When ECB, BoC, Fed announces QE – go for anything.
When Fitch/Moody upgrade country – go for anything but mostly Finance Stocks, Banks
When Reserve bank cut interest rates – go for finance, retailers, consumer goods
When there is a World Cup-anything, go for construction, infrastructure, tech, media
IPO’s  in big companies or new ones with huge/worldwide potential (Facebook comes to mind)
Buy on rumours of buy-outs, mergers - sell on confirmation
Buy week before LDT, sell by that Friday before close - yes you'll miss the divvy but you'll also skip the Ex-div share price on Monday - (except when it's a hugely successful company - only a temp dip so stay in and pocket divvy)
Stay mostly with Top40 when investing in SA, add a few wild cards/speculations
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Shares / Re: Cherrypicking & Tapouts
« Last post by Moneypenny on Today at 07:36:58 am »
19 February 2018 Monday

Up:


Alviva +7.95%
Finbond +5.00%
AECI +4.74%
Bidcorp +3.78%
CityL +3.12%
Telkom +3.03%
Implats +2.89%
AngloP +2.69%
Lonmin +2.58%
Santam +2.43%
 
Down:

Supergroup -7.89%
Curro -6.66%
Lewis -4.96%
EOH -4.28%
Nepi -2.88% now low @ 10301
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Shares / Re: student advice needed
« Last post by Moneypenny on Today at 07:31:15 am »
Hallo Nathan1014  :)

“Short term high yielding investment.” 

For me, that is a self-contradicting statement, oxymoron if you will.

Investment by nature implies long term, even if you could wing it somehow, tax on short term investment will bite you every time. As for the reason for investing in specific share, always the same – long term value company with tangible prospects, solid company.

Good Luck on your studies. :TU:

{Edit:  If they just want a La-La-Land answer, you could 'invest' short term for divvies & on rumour/speculation }
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