In the UK, winning the lottery is tax-free. However, you do have to pay:
- Income tax on interest after depositing your winnings into a savings account.
- Capital gains tax on the profit you earned from selling an asset purchased with the lottery money.
- Inheritance tax of up to 40 per cent of the lottery winnings.
Here’s how you could play games and earn money while preparing for the upcoming taxes.
Plan Ahead for Tax-Free Gifts
You can give away tax-free gifts to your family or friends, provided you survive seven years after the fact. In simple words, you don’t qualify for Potentially Exempt Transfers, and your recipients might have to pay 40 per cent of the value of these gifts if you pass away before seven years.
No matter how healthy or young, anything can happen. Make sure your tax-free gifts stay tax-free by setting aside a sum in your account to make the inheritance tax and stating this in your last will and testament.
Look at it this way: if you do end up completing the required seven years, you’ll have plenty of savings to fall back on.
Donate to A Charity
Gaming for social good isn’t a bad way to go about your taxes. It’s inherently satisfying and might make your winnings feel like your own. On the legal end, giving away 10 per cent of your total net worth to charity can help you bring down the inheritance tax.
If you’ve won a big jackpot, you might be liable to pay up a whopping 40 per cent in inheritance tax. Donate 10 per cent to charity to bring that number down to 36 per cent.
Invest to Avoid Taxes
You can’t avoid the inheritance tax entirely, but you can shield some of your money-making assets from the often-costly sum. Case in point: investments. By investing in the right business, you can protect that amount from inheritance tax and earn a few extra quid from the profits.
However, seeing as this amount would probably be entering your savings account, you’ll still be liable to pay up the income tax.
There’s plenty of farmland in the UK. What if we told you it was all exempt from inheritance tax? That’s right, people! Like business assets, agricultural assets are not counted in the inheritance tax.
The bigger a chunk you take out of your savings to buy farmland, the better you protect them from inheritance tax. However, make sure you’re tying up your money where the cash flow is.
Earn Money by Playing Games Online
Now that you know your way around British taxes, visit our charity gambling platform to win big jackpots, earn a passive income, donate to charity, and protect most of your assets from inheritance tax. Join a team to make money online right here and right now.
Contact us for assistance and support.