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Calvin says: 16 January 2024 at 15:43 If I win the Powerball and decide to put all my winnings into a savings account and live off the interest, will I have to pay tax on my interest earned only, or am I supposed to pay tax on the total amount of winnings in the account? |
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TaxTim says: 16 January 2024 at 16:12 If you win the Powerball, congratulations! Luckily for you, the winnings are tax-free. However, if you invest your winnings and earn interest, the interest earned per year above the interest exemption is taxable. This is currently R23,800 if you are under 65 years and over R34,500, if you are over 65 years. If you use the funds to buy properties, there will not be any tax liability on the purchase of the property. However, if you rent out the property and earn rental income, you wil need to pay tax on this rental income. You can read more about this here. Depending on your winnings and how you plan to invest, we recommend reviewing the tax implications of your investment. Familiarise yourself too, with the rules around provisional tax to avoid any unncessary SARS penalties for late filings or underpayments of tax. |
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