If you won the lottery, could you give friends money tax free?

Just having a bit of a daydream on how I would divvy up a lottery win. Got a bit involved to the point where I started to wonder what would be the actual repercussions of giving friends family lump sums ranging from £50k to several millions? A lottery win is tax free, but is passing some of it on?

….or is a lottery win in the millions not tax free?

All hypothetical, tho, as I don’t actually do the lottery.

yes

A h?pothetical ‘no’ cos I don’t have any friends do the lottery.

Tax free or not (on my part obviously, not theirs) I would. Both sets of parents would get all debts cleared and houses paid for. Same for BIL and siblings.
I have a couple of longtime good friends who would also get the same.
Couldn’t in good conscience live the life of a millionaire and not spread it around to those important to me and my Mrs.
Besides, few things in life feel as good as giving things to people who don’t expect it.. So it’s really about me being selfish.!! 🙂

I think you have to live for 7 years after the gift else they can get done on inheritance tax.

the 7 year rule

so just don’t crash the porsche

gifts to charities and political parties

quelle surprise

Just pretend they were an x/th part of your ‘syndicate’ 😉

My uncle won a few million a while back – I seem to remember there was a cap on how much he could give away (not in total but per recipient) before it got tax-complicated. He wasn’t a young or well man at the time though so I guess inheritance tax was more to the forefront of the advice he was getting than it would be for most people.

I remember buying a ticket for the very first lottery draw – me and my then girlfriend idly speculated on what we’d do with the money either either of us won. “I suppose the first thing I’d have to do is pay you off” she said.

No, inheritance tax will kill the living daylights out of humanity…
Well, in the U.K. Anyhoos..

Would the lucky person getting the million quid cash gift not have to pay any sort of income tax on it? Doesn’t seem right if not.

If someone bought the house their parents were living in for them from lottery cash which they had won ( while still living at home)..but then eventually moved on into their own home ..would the proceeds of that house (in due course ) be subject to inheritance tax ?

Apparently I have a Nigerian prince who is offering me something similar so I will track this thread

If someone bought the house their parents were living in for them from lottery cash which they had won ( while still living at home)..but then eventually moved on into their own home ..would the proceeds of that house (in due course ) be subject to inheritance tax ?

The best answer is… lottery winners get a lot of financial advice from the lottery 🙂

You don’t have to worry too much about whether or not you have to pay tax – after all you’ve just won a butt load of money for no effort and whatever size of inheritance bill you incur you just pay for it with more of the free money you won. You just have to be careful to make sure you don’t leave a complicated and expensive mess behind when you kick the bucket for someone else to clean up and pay up.

You can give all the money away – but it’ll be your descendants / dependants that will have to meet any tax liabilities you create so you just need to be sure that any money you gift is matched by money set aside to meet any future tax bills.

Ok ..sound advice ..but what if we are not talking millions but say 150k..most of which goes into buying the house ..

I would tell all my friends that the limit was 10k 😉

ax free or not (on my part obviously, not theirs) I would. Both sets of parents would get all debts cleared and houses paid for. Same for BIL and siblings.
I have a couple of longtime good friends who would also get the same.
Couldn’t in good conscience live the life of a millionaire and not spread it around to those important to me and my Mrs.
Besides, few things in life feel as good as giving things to people who don’t expect it.. So it’s really about me being selfish.!!

This, would also clear the debts or purchase small houses for all of my wifes extended family and put the children through university – as that would cost the best part of **** all in the country she is from.

I’d be like a pig in shit with half a dozen nice bikes, a 350k cottage in North Wales, a nice Landy Defender, a library of books and a PhD in whatever the **** I felt like at the time with no thought given to employment after – and just enough in investments to pay 50-60k a year in interest.

I would tell all my friends that the limit was 10k

Very generous of you – you can only give away £3k each year without it being added to the value of your estate. 🙂 So just make sure you set aside the money to cover each of those 10K gifts

i wouldn’t give anyone anything

i wouldn’t give anyone anything

Who’s da playa!

Might be cheaper to buy their house in cash then they buy it back of you with the same cash. 2x stamp duty cheaper than inheritance tax?

Ok ..sound advice ..but what if we are not talking millions but say 150k..most of which goes into buying the house ..

Wouldn’t give anyone owt with that amount – well, maybe a few quid to anyone that was struggling, but it’s hardly an amount to start splashing about

BTW, All this was sparked by seeing the Euromillions was at a mildly sickening £122m.

No, inheritance tax will kill the living daylights out of humanity…
Well, in the U.K. Anyhoos..

What does that even mean? There’s a pretty good argument that inheritance tax should be much more and very hard to weasel out of. Imagine if folk had to spend the wealth they made in their lifetime rather than hoard it.

Who’s da playa!

i dont ger **** all from any of my family at the moment, why would i shower them with gifts?

What does that even mean?

Don’t sweat it. BB’s posts are not meant to mean anything, they just exist. All very meta.

i dont ger **** all from any of my family at the moment, why would i shower them with gifts?

Orphans then! 😛

I’d be like a pig in shit with half a dozen nice bikes, a 350k cottage in North Wales, a nice Landy Defender, a library of books and a PhD in whatever the **** I felt like at the time with no thought given to employment after – and just enough in investments to pay 50-60k a year in interest.

Sometimes I look back on my educational choices and think what a **** I was. But then, **** it, I wanted to do it. Nice to have done one of someones lottery dreams.

I may yet go and do something with no funding in it AA. Right now me and the missus just have to worry about getting her through her indefinite leave to remain in 2.5 years.

If I got the big 122m tomorrow I’d splash out and make you all premium subscribers. No more adverts for anyone!!

No ads for me….

What does that even mean? There’s a pretty good argument that inheritance tax should be much more and very hard to weasel out of. Imagine if folk had to spend the wealth they made in their lifetime rather than hoard it.

Yep, personally I think it should be something like 95% with the odd exception for genuinely dependant children e.g. disabled etc.

Reminds me to login and check the “win” from Saturday. I wish they’d just send a message along the lines of “hi good news you’ve jist won a few quid, don’t give up the day job though” and save the current ones for something more substantial

They do email you.

We’ve got some news about your ticket from the draw on Friday 8 Sep 2017.

Oh wait you mean email you only when it’s substantial?

That’s silly.

In the UK, you can gift up to £3,000 a year to someone tax free. There are also some ways you can get around things by setting up a trust rather than paying directly etc.

This topic is outlined quite well in this article, it also tells you different tax rates on lottery winnings around the world if you’re interested:

I suspect you’d be just fine – after all our taxation system is an income based one, not a wealth based one.

I believe the money stays tax free, not sure how that’s policed but there you go, as someone else said I believe Coutts who used to give advice to winners a couple of years back did use the whole “% of syndicate” thing – not sure if HMRC really believed your Aunty Mabel really did give you 0.003p a week for her share, but they seem to allow it.