Every lottery player in the United Kingdom dreams of hitting that big jackpot, but a question on every winner's mind is always; do you pay taxes on lottery winnings in the UK?
Millions of pounds are won every year in various lotteries across the UK, changing the lives of the winners in an instant. We're always hearing about the new houses and cars bought by lotto winners, how they pay off their debts and secure a life of financial freedom.
But one of the first thoughts going through the minds of lottery winners in the UK is "are my winnings taxable?"
The short answer is no, lottery winnings in the United Kingdom are not directly taxable. However, winners are subject to taxes such as income or gift tax. There are also various taxes involved when banking your winnings.
Lottery winnings are NOT taxable in the UK!
For example, if you deposit money into an account which in turn accumulates interest, you will need to pay capital gains tax on that interest. But this extends to any money accumulating interest and cannot be said that you are paying interest on the lottery winnings.
Also if you intend on investing your lottery winnings in businesses or stocks there are also the respective taxes involved.
There are also no taxes paid on lottery winnings that have been won by a UK lottery syndicate. The HMRC have said that, "No liability to inheritance tax arises on winnings by a football pool, National Lottery or similar syndicate provided that the winnings are paid out in accordance with the terms of an agreement drawn up before the win."
So remember; the UK is the best place to win the lottery if you're worried about paying taxes.
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