So you’ve been fantasising about winning all that crazy Powerball money, tonight’s jackpot sitting on R25 billion (buy tickets HERE), but you’ve got that one mate in your ear spewing rubbish about taxes and the like.

‘You’re going to be left with nothing’, they say. ‘Don’t waste your money’, they say. Well how about you tell them to shut their pie holes, because here is what you really need to know about how much dough is headed your way.

We asked our friends over at Galbraith Rushby, the tax experts with a personal touch, to give us the exact lowdown.

Over to the experts then:

The question of how much tax and which type of tax would become payable on winning the $1.5 billion Powerball Jackpot is a complicated one. A person who gambles habitually for a living could see their gambling winnings included in their gross income and subject to normal income tax, which at the highest margin is currently 41%. Setting aside this scenario we’ll deal with the ordinary people, who have bought a ticket or tickets in the hope of winning the Powerball Jackpot, and assume the lump sum option rather than the annuity option is selected.

Local cash winnings, prizes and the sale of these type of tickets are not subject to tax in South Africa if they are conducted or authorised within the laws of South Africa. Assuming that this does not apply to the Powerball Jackpot, as it is based in America, these winnings could be taxed in South Africa. According to SARS’s Capital Gains Tax Guide, foreign winnings would be subject to South African Capital Gains Tax. With this amount of money at stake the law would have to be carefully scrutinised and investigated.

On the assumption that capital gains tax is payable, individuals are required to include 33.33% of the gain into their taxable income and then apply the relevant tax table percentage. Therefore capital gains tax effectively ranges from 0% to 13.33%, at the highest tax bracket.

So let’s crunch some numbers and see exactly what you’re forking out then. Remember, you’re taking the lump sum payout of $930 million.

Another consideration is whether tax would be payable in the United States of America. This is complicated due to the various state laws and US law which allows the US to withhold 30% of winnings paid to foreign persons. Normally a rebate is obtainable within South Africa for foreign taxes paid, and in theory you should not pay double tax. However, close attention to what type of taxes are being paid in the US and whether these would qualify for the rebate would need to be investigated.

If you are the lucky winner firstly ensure that its not Steve Harvey announcing the winner, then seek tax advise both in America and South Africa which investigates the tax law, the double taxation agreement, withholding taxes both within South Africa and America and takes into account your personal situation.

Got that? See, you’re still walking away with one helluva pay day no matter what tax is applied. As for seeking tax advice you might want to start with Galbraith Rushby, they do far more than sort out those who have more money than they know what to do with.

Happy spending, and be sure to tell that pessimistic friend who told you not to bother to enjoy working until 65.