Ok, I am in the UK, I win £5million on the lottery, and want to give £1million to my parents, my bro and a friend... will they be taxed on this? I asked this already and people started talking about inheritance tax... don't know why, I have no plans to die in the next 7 years, or even 50 years! If they can be taxed, to what amount, and how do I get round it?
2006-07-07 02:55:32 · 8 answers · asked by Mustard Jones 2 in Business & Finance ➔ Taxes ➔ United Kingdom
Yes, it would be taxed.
One option is do have a family syndicate agreement so that you are all classed as winners and decided what proportion you are each equal too.(There is no rule to say its equal)
Just draw it up, sign it, and present it to Camelot.
2006-07-07 23:08:30 · answer #1 · answered by 'Dr Greene' 7 · 0⤊ 0⤋
Good news - most of the answers up above are completely wrong!
1. When you win the money, there is absolutely no tax as its a game of chance and not a 'source of income'.
If you give it away there are 3 taxes that you might think about for the recipient:
a) income tax - no tax as this is a gift and not a source of income
b) capital gains tax - no tax as the legislation exempts cash from this tax, its only for non-cash assets
c) inheritance tax - the folk you have been speaking to are correct. A gift of cash from one individual to another is known as a 'potentially exempt transfer'. If you survive 7 years after making the gift, there is no tax and the gift becomes completely exempt. If you're unfortunate enough to die within 7 years the recipients of the cash may have to pay some tax. If you're young and healthy but want to avoid your recipients paying any tax should you die, you can get an insurance co to set up a policy on your life. This would pay out enough if you die to cover the tax that your friends/family have to pay.
Hope this helps.
2006-07-09 06:28:04 · answer #2 · answered by Flick W 2 · 0⤊ 0⤋
If you give somebody money as a gift it is seen by the tax office as income and will be taxed, 22% is a good starting point but if you get a good accountant he will see that minimum tax is paid, there is no way around it but you can minimize it, that is why lottery winners are advised by financial advisers from the off to minimize taxation when the money is gifted, it is a criminal offence to evade tax. Hope this helps
2006-07-07 05:26:12 · answer #3 · answered by MSMORTGAGE 3 · 0⤊ 0⤋
does noone listen to me
its not taxable!!!!!!!!!!!!!!!!
unless u die then it mite b classed under inheritence tax
if u wanna b really sad there is a way round it
sell ur parents a raffle ticket for £1
1st prize in the raffle is £1000000 and ur parents ticket is the only ticket sold
so they win the money
good enough?
2006-07-07 03:11:45 · answer #4 · answered by Anonymous · 0⤊ 0⤋
It is not inheritence tax but Capital gainsTax
2006-07-07 02:58:47 · answer #5 · answered by BackMan 4 · 0⤊ 0⤋
Give it to them in the form of a loan agreement payable at a pound a year
2006-07-07 03:10:23 · answer #6 · answered by Anonymous · 0⤊ 0⤋
Im pretty sure whoever you gave the money to would have to pay capital gains tax as it would be classed as unearned income.
2006-07-07 03:00:26 · answer #7 · answered by Anonymous · 0⤊ 0⤋
i dont know that but i do know u dont know when u r going to die god is the one that makes that choice
2006-07-07 03:00:44 · answer #8 · answered by Anonymous · 0⤊ 0⤋
i doubt it but phone the HMRC to double check
2006-07-07 06:47:41 · answer #9 · answered by Anonymous · 0⤊ 0⤋