Euromillions - About, Prizes and Taxes

EuroMillions is a jackpot system in the U.K. The jackpot system was first established by three countries, namely Britain, France and Spain. However, over the course of the year’s nine other countries have joined in. At present, the list of countries for EuroMillions includes the three founding countries as well as Portugal, Luxemburg, Austria, Belgium, and Switzerland. Players from the Isle of Man, Monaco, Liechtenstein, and Andorra can also play the game.

About the Game

EuroMillions is a lottery game. A player wins according to the series of the numbers drawn. Furthermore, the numbers are pulled out at random. The EuroMillions system has an automatic checker which checks the user’s numbers once the account has been made and registered.

The game asks the user to choose five numbers of their choice between on to fifty-one. And then choose two-star numbers between one and twelve. The game also allows the user to check their statistics and allows every user an equal chance to win the game. There are various kinds of amounts given out as prizes along with one jackpot.

Who can Play?

In some countries, only those of age twenty-one or older are allowed to play the game. In other countries, the age for legally playing this game is eighteen. In the UK, however, the minimum age required to participate in the game is sixteen. But if the player wishes to play through other websites or intermediaries, the age limit may be different according to their policies.

Taxability

Tax is payable on the winnings of the EuroMillions. But depending on the country of residence the tax rate may differ. In the UK, the country demands larger payments of amounts or larger winnings to be taxed. Apart from this Spain, Portugal and Switzerland levies taxes on the player with larger winnings as per their regulations. The other countries do not levy any tax on the players or winnings.

Method of Taxation in the UK

In the UK, if a player’s winnings are more than that of £325,000 as individuals or more than £650,000 for a married couple, which adds to their estates is taxed as inheritance tax. The only condition is that the winnings from the jackpot should increase the expanse of one’s estates to be taxed as an inheritance tax.

The basic rate of inheritance tax of 40% is levied on the earnings of the threshold and on anything above the threshold. Plus, the inheritance tax rate can be reduced to 36%, if an individual or a married couple decides to give away at least 10% of the winnings to a charity. If the winnings are given as a gift, then the tax reduction is by 20% on the winnings. And if the individual or the couple makes a gift of the money to their loved ones and dies within the seven months of giving away such gift, the money will still be taxable. However, the recipient of the gifts may opt for other ways of saving themselves from paying the money for inheritance tax from their pockets.

If a person is a member of any kind of lottery syndicate, it is of utmost importance to have a legal agreement which states the particulars of the syndicate. Because if a person transfers the winnings of lottery or jackpot and die after that, you will still have to pay the money for the money transferred. But if you have a legally enforceable agreement, such mishap will not take place.

The UK government also provides some relaxations on the lottery earnings, which reduces the tax burden. Furthermore, the UK National Lottery provides help and planning ideas for such things.

Tax on Other Kinds of Prizes

Prizes in the UK are tax-free. The winnings in the football pool, national lottery or by way of syndicates, is free of any kind of tax. The only requirement for such earnings is that the payout should be made according to the agreement drawn before the payout is made. Furthermore, the agreement and its particulars should be followed. In some cases, interest on the investment of such money could also be made. The National Lottery advises all members to open a special account in a private bank where the employees are used to handling larger transactions for the safety of the members.

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About the author

Sumit Agarwal
Sumit Agarwal (ACMA ACA India), the Managing partner of dns accountants is a highly respected accountant with expertise in helping owner-managed businesses.