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Congratulations on your lottery win - or perhaps you're just planning for that lucky day! While UK lottery winnings are completely tax-free when you first receive them, many winners don't realise that what happens next could still have tax implications.
Use our simple UK lottery tax calculator to see how your tax-free lottery winnings might be affected by income tax on interest, inheritance tax on your estate, and gift tax implications - just enter your winning amount, expected interest rate, tax bracket, and planned gifts, then click "Calculate Your Tax" to get your personalised results.
Disclaimer: This calculator provides estimates only and should not be considered financial advice. Tax rules may change. Please consult with a qualified tax professional for advice specific to your situation.
Are lottery winnings taxed in the UK?
Lottery winnings are not taxed in the UK. Winners receive the full amount, and there is no requirement to pay income tax on the prize. However, interest earned from investing the winnings and gifts to others may be subject to income tax or inheritance tax.
Understanding your lottery tax
In the UK, all lottery winnings—whether it's the National Lottery, EuroMillions, or scratch cards—are entirely tax-free. Unlike countries such as the United States where winners can lose up to 45% in taxes, you'll receive every penny of your UK lottery prize. However, once that money is in your account, several tax considerations come into play:
Interest on your winnings
When your jackpot sits in a savings account earning interest, that interest could be taxable depending on your tax bracket and how much you earn.
Gifts to family & friends
Planning to share your good fortune? While you can give money away tax-free, these gifts could be subject to Inheritance Tax if you die within 7 years.
Future inheritance
Your lottery winnings become part of your estate, potentially pushing it over the Inheritance Tax threshold and creating a significant tax bill for your beneficiaries.
How our calculator helps
Our easy-to-use lottery tax calculator gives you a clear picture of your potential tax situation after winning the lottery. Simply input:
Your lottery winnings amount
Expected interest rate
Your tax bracket
Planned gifts to others
Value of your current estate
With a click of a button, you'll see exactly how your winnings might be taxed in various scenarios, helping you make smarter financial decisions.
Make informed decisions with your windfall
Whether you've won £10,000 or £10 million, understanding the tax implications can help you:
Choose the right savings and investment vehicles
Plan gifts to loved ones more effectively
Protect your wealth for future generations
Avoid unexpected tax surprises
Examples: Potential tax impact of lottery winnings
While UK lottery winnings are tax-free when you receive them, what happens after can have tax implications. Below are examples showing potential tax scenarios based on different winning amounts and interest:
Winning Amount
Annual Interest (3.5%)
Tax on Interest (Higher Rate)
Inheritance Tax Liability
Gift Tax (if giving £50,000)
£10,000
£350.00
£0.00 (Below allowance)
£0.00 (Below threshold)
£0.00 (Within 7-year rule)
£100,000
£3,500.00
£1,200.00
£0.00 (Below threshold)
£18,800.00 (If you die within 7 years)
£1,000,000
£35,000.00
£13,800.00
£270,000.00
£18,800.00 (If you die within 7 years)
£10,000,000
£350,000.00
£139,800.00
£3,870,000.00
£18,800.00 (If you die within 7 years)
Assumptions:
Interest rate of 3.5% per annum
Higher rate (40%) taxpayer with £500 Personal Savings Allowance
Tax on interest calculation: (Interest - £500) × 40%
Inheritance tax calculated as 40% on amount above £325,000 threshold
Gift tax calculation assumes £50,000 gift with £3,000 annual exemption, 40% tax on remaining £47,000 if you die within 7 years
Existing assets of £0 (for inheritance tax calculation)
Note:These are simplified examples for illustrative purposes only. Your actual tax situation will depend on your personal circumstances, existing assets, and current tax rates. For accurate calculations based on your situation, use the calculator above or consult a qualified tax professional.
More about lottery tax
Helpful resources covering key topics. Easy-to-understand information for better decision making.
