What is the percentage of taxes on an automobile that was won and what value would the taxes be figured off of?
2006-12-20 07:31:35 · 4 answers · asked by blondiebwl 1 in Business & Finance ➔ Taxes ➔ United Kingdom
If you won an automobile, then the fair market value of the automobile is considered taxable income to you. This will be taxable for both federal and state purposes. The fair market value is the amount of money the car in the condition you received it is worth. If the car is a new car, and purchasing the car new from the dealer would be $20,000, then you will need to report $20,000 as income on your tax return. You shouldn't be subject to sales tax when you register the car since your purchase price is $0 (you won the car so you didn't have to pay anything for it). You would be liable for any licensing fees in order to register the car though.
2006-12-20 07:47:43 · answer #1 · answered by jseah114 6 · 1⤊ 0⤋
In the UK, prizes are generally exempt from income tax. So if you enter a consumer competition or go on a quiz show on TV then your winnings are tax free.
The only time such prizes become taxable are where they are acquired "by virtue of" your employment. That phrase can be a bit tricky to interpret so lets look at some examples.
If your employer presents you with a car for achieving a certain sales figure then I'm sorry but this is not really a prize. It is disguised commission and would be taxable. In fact almost any award given to you by your employer will be taxable. There are certain well-defined exemptions such as long service awards and suggestion box schemes but these are limited in the amount they can pay.
If you enter a competition run by a supplier to your company and entry is restricted to the promoter's customers (or goods have to be bought in order to enter) then any prize you win will technically belong to your company. If they let you keep this then I think you will have to pay tax on the market value at the time they give it to you. (This could be lower than list price as the car is now second hand)
If the competition run by a supplier is in fact open to anyone to enter then you would be entitled to any prize without any tax liability.
2006-12-20 19:41:53 · answer #2 · answered by tringyokel 6 · 0⤊ 0⤋
They will pay the state sales tax. Check your state for the percentage. You will also have to claim in on both your State and Federal income tax forms.
2006-12-20 07:35:00 · answer #3 · answered by robsrecordbin 2 · 0⤊ 0⤋
It depends on your tax bracket and the cost of the auto. Without knowing your income or cost of car, I would say between 15-20 % of the value of the car
2006-12-20 07:35:56 · answer #4 · answered by JohnT 2 · 0⤊ 0⤋