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Online Share Trading

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Taxes

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logotino
Contributor
Hey, I'm just curious as to how the taxing on shares works. Obviously there is the dividend withholding tax, but is there some form of capital gains tax and does it get deducted from my account automatically?
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2 REPLIES 2
Not applicable
No, it wont be automatic, you settle taxes same way as buying and selling houses - once a year in tax season.
Dividends tax is automatic as its the brokers obligation to withhold the tax.
If you hold shares for 3 or more years you pay CGT on them, otherwise they are taxed same as your salary.
Thats the very basic advise, but obviously theres more to it, if you want more specific advise its best to see a professional.
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Blik
Super Contributor
You can either pay CGT when you sell your shares, assuming a profit, or you can pay income tax. Much depends on your intent when you bought the share. If you hold a share longer than 3 years, SARS deems your intent "investment" in nature and gains are taxed by the CGT route. If your intent was a short term capital gain, then you could be taxed at income tax levels. If your gains are miniscule, you could fly under the SARS rader, I guess. I have opened up two accounts on my SFM trading - no extra cost - and all my trading is done in one account and all my investing in another. This keeps the tax clean and simple. This is my simple understanding of it. I am sure there are all sorts of sneaky clauses, and for that if you want professional advice, best chat to one.
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