Gift tax?

[AngelofDeath]

Hypothetically, if i was to win �10 million on the lottery and wanted to share the winnings with friends, say �1 million each, would those friends have to pay gift tax?

I know that making an agrrement is a better way of doing it, so please don't suggest that.

[Postdog]

Having watched the Euromillions climb up and up, I have looked into it JUST IN CASE... I know if I won that much, then I'd like to give my friends and acquaintances up to a million each so their lives changed too.

Anyway, the simple answer is NO, there is no tax to pay PROVIDING the gift is made from what you win, and not interest earned on it BUT if you die within 7 years of making that gift, then they would be liable to pay tax at up to 40 per cent of the gift. So basically, if I won, I'd give out a million but I'd warn the person I gave it to that to be safe, only spend �600,000 and keep the other �400,000 invested until those 7 years are up just in case they need to pay the taxman.

[rojash]

Postdog and AngleofDeath, did I ever tell you how much I like you? I regard you as really special friends!

[mibn2cweus]

rojash, Gzzz, wipe your chin man !

[Loosehead]

There is no such thing as "gift tax". As postdog says, the only potenial problem is that it could become part of your estate if you die within 7 years, there is taper relief though so the longer you live the cheaper it would be until eventually being 0 after you survive 7 years beyond the date of the gift.

[dzug]

Postdog, it would not be your friends who paid the IHT - they are not liable. It would be YOU in the form of your estate, assuming you hadn't spent all the winnings you had kept for yourself.

Not sure what happens if you have spent it all......

[neg213]

I was thinking about this yesterday, if i won, could i open a bank account (with �1 million in) and give the person i wanted to share the winings with, the card and pin number?