Answers · UK 2025/26
Do you pay tax on lottery winnings in the UK?
No -- lottery prizes, including National Lottery jackpots, are completely free of UK income tax and Capital Gains Tax regardless of the size of the win. However, interest or investment returns earned on the winnings are taxable, and gifting large sums may have Inheritance Tax implications.
Full answer
Lottery winnings themselves are not taxed in the UK. Whether you win £10 on a scratch card or £50 million on EuroMillions, HMRC does not take a share of the prize. **What is not taxed** - National Lottery wins - EuroMillions prizes - Premium Bonds prizes - Scratchcard winnings - Football pools and prize competitions - Betting winnings (on a one-off personal basis) **What IS taxed after you win** The tax-free status only applies to the prize itself. Once you invest or deposit your winnings, any returns are fully taxable: - **Savings interest**: taxed as income above the Personal Savings Allowance (£1,000 basic rate; £500 higher rate; £0 additional rate) - **Investment returns**: dividends taxed above the £500 dividend allowance; capital gains taxed above the £3,000 Annual Exempt Amount - **Rental income**: if you buy property with winnings, rental income is taxable in the usual way **Inheritance Tax (IHT) considerations** If you give away lottery winnings, the IHT rules apply in the usual way: - Gifts to a spouse or civil partner: exempt - Gifts to others: potentially exempt transfers (PETs) -- IHT-free if you survive 7 years - Gifts out of normal income: potentially exempt immediately - Gifts above the annual £3,000 exemption made within 7 years of death may be subject to IHT at 40% **Tax-efficient options for your winnings** 1. **ISA**: shelter up to £20,000/year per person (£40,000 per couple) from tax on returns 2. **Pension**: contribute up to £60,000/year (or 100% of earnings) and receive tax relief 3. **Premium Bonds**: prize fund rather than interest -- prizes are tax-free 4. **Spread across family members**: use each person's allowances **No declaration needed** You do not need to declare the lottery win itself to HMRC. However, if the investment returns from your winnings push you above tax thresholds, you may need to register for Self Assessment.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.