Winning a lot of money/tax implications.

[Getragdogleg]

I have been following the Inheritance tax thread with interest and It has raised an interesting question, If someone won a very large sum of money, say the Lotto or a big bet on the horses, would they pay any tax ?

For arguments sake lets say the sum is £1000,000. the ticket was bought in a shop/bookies here in the UK.

Would you have to declare it ? would the organisers of said Lotto/Bookies have to tell the Govt ?

[Manks]

Gambling winnings are tax free.

[smartie]

There can be issues if smeone is a professional gambler, but generally ( and I would say always with a lottery win) gambling winnings are tax free.

[Getragdogleg]

Wow, i would have thought the Govt. would have had their hand out instantly.

Thanks for the speedy question response !

[davido140]

Getragdogleg said:

Wow, i would have thought the Govt. would have had their hand out instantly.

Thanks for the speedy question response !

Dont forget that a huge percentage of lottery money goes to prop up museums, arts, social projects and charities that the government should really be paying for in the first place, in a way they DO get a fair chunk of the cash that is spent on the lottery, the prize fund is a tiny percentage.

Edited by davido140 on Sunday 25th April 12:04

[sinizter]

smartie said:

There can be issues if smeone is a professional gambler, but generally ( and I would say always with a lottery win) gambling winnings are tax free.

Not too much of an issue really. A professional gambler would be able to get a tax rebate on losses - The government will not want to do this. So gambling winnings will remain tax free.

[markmullen]

Don't forget that the interest on these winnings would be taxed, quite an issue when you look at some of the big Euromillions wins, like the couple who won £56m, the interest on that will be quite chunky as will the tax.

[t11ner]

I thought the tax was paid on gambling and lottery when you bought the ticket, everyone pays at that point.

Also, didn't you used to be able to choose to pay the tax when you placed a bet (small amount) or place it tax free but have to pay on any winnings (bigger amount)?

They always get a slice somewhere

[Somewhatfoolish]

t11ner said:

Also, didn't you used to be able to choose to pay the tax when you placed a bet (small amount) or place it tax free but have to pay on any winnings (bigger amount)?

Yes, but they abolished that. One of the few good things Labour did.

[strudel]

One of the reasons I believe it is tax free is because they make more money out of tax on the company's profits than they would do on the winnings.

[davido140]

strudel said:

One of the reasons I believe it is tax free is because they make more money out of tax on the company's profits than they would do on the winnings.

The national lottery is not for profit and isnt taxed.

There are almost certainly "special" rules and regulations surrounding this too.

That almost certainly applies for casinos/bookies etc though.

[Jasandjules]

markmullen said:

Don't forget that the interest on these winnings would be taxed, quite an issue when you look at some of the big Euromillions wins, like the couple who won £56m, the interest on that will be quite chunky as will the tax.

I'd be willing to pay tax on that interest - as long as I got the win the 56m in the first place.....

[Maxf]

Getragdogleg said:

Wow, i would have thought the Govt. would have had their hand out instantly.

Thanks for the speedy question response !

If they taxed it, then arguably they would have to make losses tax deductible - and there are more losers than winners, overall.

[Soovy]

A lottery win is tax free, as are the profits from Spread Betting.

[Eric Mc]

Except when the winnings have become part of a deceased's estate - when they may be liabile to Inheritance Tax.

[Soovy]

Eric Mc said:

Except when the winnings have become part of a deceased's estate - when they may be liabile to Inheritance Tax.

The absolute b stards.

[Emeye]

Somewhatfoolish said:

t11ner said:

Also, didn't you used to be able to choose to pay the tax when you placed a bet (small amount) or place it tax free but have to pay on any winnings (bigger amount)?

Yes, but they abolished that. One of the few good things Labour did.

Why is it a good thing? Doesn't it encourage gambling?

[t11ner]

12% lottery duty is payable according to THIS.

Did anyone really think it would be tax free all the way?

[Somewhatfoolish]

Emeye said:

Somewhatfoolish said:

t11ner said:

Also, didn't you used to be able to choose to pay the tax when you placed a bet (small amount) or place it tax free but have to pay on any winnings (bigger amount)?

Yes, but they abolished that. One of the few good things Labour did.

Why is it a good thing? Doesn't it encourage gambling?

So?

It also makes it considerably easier to make money gambling if you're good at it

[Manks]

t11ner said:

12% lottery duty is payable according to THIS.

Did anyone really think it would be tax free all the way?

Not paid by the winner. That's a levy charged on the ticket price and paid by the lottery company. The OP's question related to taxation upon the winner.

Manks