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Before we start - I haven't won, most I have ever won is £5.
There was a young lad (20's) on the local news the other night who had scooped the £10k a month for 30 years - luck lad! (Although why he went public is beyond me - but that's another discussion).
It go me thinking about large wins and what happens with tax etc.
If you get a regular payment like the lad (I assume they give you £10/month and not just dump £3.6m in your account) how are you taxed?
And again if you win a huge lump sum what happens?
Lottery wins are tax already paid
Lottery winnings aren't taxed in the UK so I'd guess that even if it's a regular payment that no income tax or NI would be payable.
10k per month net would be equivalent to just of 200k pa gross
AFAIK The initial lump sum is tax free but any interest earned on it will be taxed at the appropriate level.
All above correct ..the 10k is post tax but any that in an account is then subject to taxes after that ...
It's prepaid tax you can do the same at a bookies so tax free.
I did think it was case no tax is liable.
Presumably in many ways its better to get a regular (large!) amount than dump it all in your account and then be liable for interest on the amount (what's the situation if you pop it before 30 years are up?)
Never done lottery, never even been in a bookies :/
Gambling winnings Tax free in the UK.
Has been for years.
Can’t prepay tax in bookies as none is due 👍
Ah! Has it changed Neal as you use to I don't bother anymore just do it online.
Oh Google says since 2001 😂
Presumably in many ways its better to get a regular (large!) amount than dump it all in your account and then be liable for interest on the amount (what’s the situation if you pop it before 30 years are up?)
The old ‘I’m not doing overtime, I’ll pay more tax’ idea.
Yes you pay tax on the interest. But only a portion of it. You’d be *much* better off (purely financially) after 30 years if they just transferred £3.6m.
Whether you’d be happier, or better off in real world conditions is a different subject.
For avoidance of doubt: either 10k pcm or £3.6m would be fine with me!
And yes, it might not be worth your while doing the overtime, but you’d still have more take home, and pay more tax if you did the overtime. Mostly. Unless sometimes I’d benefits complicate things. Or that thing recently with doctors and pensions: they got screwed there. Being *actually* worse off (overall, due to taxation quirks) if they did more shifts, so chose not to, then got ridiculed in the media for ‘refusing to work’.
agreed.
presumably - as well - the £3.6m is not really £3.6m after 30 years, and they can hedge that / invest it rather than hand it all over.
The why he went public also has an answer.
The Lottery people will give you lots of free financial advice with what to do with your winnings, how to invest, save, spend etc.. IF you go public.
If you have no publicity they won't offer this and you're on your own.
Errrr! Pretty sure that’s not true they offer it regardless, certainly did with some people I know who won big.
Indeed, you get the advice and help either way.
Not in any way related to bribery to go public.