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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. 
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?




 

Thanks that sort of confirms my thinking. 
This is something to ponder though:

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