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UK MAIN GUIDEUK Lottery TaxNational Lottery · syndicates · gifts · estates
Tax on Lottery Winnings
What is tax-free when you win, and what may be taxed later.
Country first
Start With the Country Where the Ticket Was Bought
There is no single worldwide rule for lottery tax. Start with the country where the ticket was bought. If you live somewhere else, you may also need to check the tax rules where you live.
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U.S. MAIN GUIDEU.S. Lottery TaxFederal · state · Powerball · Mega Millions
Powerball Taxes by State
See federal tax, state tax and an estimated take-home amount for each Powerball state.
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WORLDWIDE OVERVIEWLottery Tax Around the WorldThe rules are different in every country
Compare Other Countries
Quick tax rules for Australia, Canada, Spain and Ireland, kept separate from the UK and U.S.
🇬🇧 UK Lottery & Prize Tax
2026/27UK: The Prize Can Be Tax-Free — What Happens Next Depends on What You Won
UK lottery and competition prizes are generally received as windfalls rather than taxable earnings. Tax can arise afterwards from savings interest, investments, rental income, capital gains, gifts and inheritance. Start with the route that matches what you are doing with the prize.
Path 1 · Money
Lottery Winnings & Money
Start here for a cash jackpot, savings, investments, syndicates and what becomes taxable after the win.
Path 2 · Family
Gifts, Family & Inheritance
Use these guides if you are giving money away, helping children, planning an estate or thinking about what happens after death.
Path 3 · Assets
Prize & Competition Tax
House, car, watch, jewellery or another physical prize? The tax treatment can change dramatically depending on the asset.
What did you win?
Choose the prize type rather than trying to apply one tax rule to everything.
💷 Cash / jackpotPrize first, then interest, investing and gifts. 🏠 HouseOmaze, Raffle House, BOTB and other property prizes. 🚗 CarPrivate cars are generally CGT-exempt. ⌚ WatchWatches are often exempt as wasting assets. 💎 Jewellery / artChattel and Capital Gains Tax rules can apply. 🏷️ Selling a houseMarket value, Private Residence Relief and CGT.
Simple rule: winning the prize and what happens afterwards are separate tax questions. A £10 million National Lottery prize is not taxed as UK income, but later interest can be taxable. A competition house may create rental income or CGT later. A private car is generally CGT-exempt, while jewellery or art can fall under the chattel rules.
🇺🇸 U.S. Lottery Tax
Tax year 2026U.S.: Check Federal Tax First, Then Your State
For U.S. taxpayers, lottery winnings are usually taxable. Federal tax may be withheld before you receive the money, but that is not always the final amount you owe. Your state may also tax the win.
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Main
Main
Powerball Taxes by State
Compare 2026 federal and state tax rules in one place.
Open state tax index →🇺🇸
Calc
Calc
Powerball Tax Calculator
Enter a Powerball prize and estimate how much could be left after federal and state tax.
Open calculator →🇺🇸
State
State
Lottery Tax by State Calculator
Choose a state and compare how much tax could come off the prize.
Open state calculator →🇺🇸
MM
MM
Mega Millions Tax Calculator
See how federal and state tax could reduce a Mega Millions prize.
Open calculator →🇺🇸
Choice
Choice
Cash vs Annuity
Compare the cash option with the annuity before deciding what the headline jackpot is really worth to you.
Open cash vs annuity →🌍
Non-US
Non-US
IRS Forms for Non-Residents
For winners outside the U.S.: withholding, W-8BEN, 1042-S and tax treaties explained.
Open non-resident guide →Find Your Powerball State Tax Calculator
Choose your state to open its Powerball tax calculator. MLL covers all 45 Powerball states plus Washington, D.C.
State tax rules can change. Use the calculator as a guide, then check the state tax authority if you are dealing with a real win.
If you live outside the U.S.: the tax can be different. The IRS normally starts with 30% withholding on nonresident gambling winnings, but tax treaties can reduce or remove it. State tax may still need checking.
More U.S. tax tools: IRS lottery tax forms · Pool tax calculator · Winner tax roadmap
More U.S. tax tools: IRS lottery tax forms · Pool tax calculator · Winner tax roadmap
🌍 Lottery Tax Around the World
Quick country guideOutside the UK and U.S., Check Each Country on Its Own
There is no single worldwide lottery tax rate. Australia, Canada, Spain and Ireland all handle winnings differently, so check the country that applies to your prize.
🇦🇺Australia
Ordinary lottery prizesMost ordinary lottery and raffle prizes do not need to be declared as income in Australia. Money you later earn from the winnings can be treated differently.
🇨🇦Canada
Winnings generally non-taxableCanada generally does not tax lottery winnings. But if you put the money in savings or investments, the income it earns can be taxable.
🇪🇸Spain
Special lottery levyFor the main official Spanish lotteries, the first €40,000 of a prize is currently exempt. The amount above that is taxed at 20%. If a ticket is shared, the exemption is shared too.
🇮🇪Ireland
Specific exemptionsIn Ireland, lottery winnings are exempt from Capital Gains Tax, and the winnings themselves are also exempt from Capital Acquisitions Tax. Tax may still apply to money earned from the prize later.
Won a lottery abroad? Do not assume the country running the lottery is the only one that matters. Where you live can also affect the tax, and some countries have tax treaties with each other.
What happens next
The Prize May Be Tax-Free. What You Do With It May Not Be.
Think of receiving the prize and what happens afterwards as two separate tax events. Cash can earn taxable interest or investment returns. A house can create rent or a later capital gain. Gifts and estates have their own rules.
Receive the prize
First, check whether tax is due on the prize itself where the ticket was bought and where you live.
Save or invest it
If you save or invest the money, interest, dividends and investment gains may be taxed in the normal way.
Gift or share it
Sharing a syndicate or pool prize is not the same as winning alone and then giving some of the money away.
Own, sell or leave assets
Property, cars, watches, jewellery and other prize assets can each have different CGT, income or inheritance rules.
Quick comparison
Quick Lottery Tax Comparison
A quick comparison. Use the country guide if you need the detail.
| Question | 🇬🇧 United Kingdom | 🇺🇸 United States | 🌍 Other examples |
|---|---|---|---|
| Is the prize itself taxed? | No UK Income Tax on a National Lottery win. Lottery winnings are also outside CGT. | For U.S. taxpayers, lottery winnings are usually federally taxable. | Australia and Canada generally do not tax ordinary lottery wins. Spain taxes the part of qualifying official prizes above its exemption. |
| Withholding at claim? | No UK Income Tax is withheld from the National Lottery prize itself. | A 24% federal withholding rate can apply to U.S. taxpayers. Different rules can apply to nonresidents. | It varies by country. In Spain, the special lottery tax is taken when the prize is paid. |
| Can later returns be taxed? | Yes. Interest and investment returns can be taxable. | Yes. Normal federal and state tax rules still apply to money earned afterwards. | Often, yes. Canada, for example, taxes income earned from the winnings even though the prize itself is generally tax-free. |
| Do gifts/estates matter? | Yes. Large gifts and inheritance can bring UK Inheritance Tax rules into play. | Yes. Gift and estate tax have their own rules. | It depends on the country. Check the local rules rather than assuming they work like the UK or U.S. |
Primary sources
Where We Checked the Tax Rules
The main tax facts on this page were checked against government and tax-authority websites. Last checked 17 September 2026.
For a real win: check the latest official guidance as well. Tax rules can change, especially U.S. state rules and overseas claims.
Lottery Tax FAQs
Short answers for navigation. Use the detailed country guide or calculator before making a real tax decision.
Are UK National Lottery winnings taxed?
No. A UK National Lottery prize is not subject to Income Tax, and lottery winnings are outside Capital Gains Tax. Tax can apply later if the money earns interest or investment returns.
Do I pay UK tax on interest earned from lottery winnings?
Yes, it can. Once the money is in savings or investments, the normal tax rules for interest, dividends and investment gains can apply.
Can giving lottery winnings away create UK tax issues?
Giving money away does not suddenly make the lottery prize taxable as income. But large gifts can affect Inheritance Tax, including the seven-year rule.
Do I pay tax if I win a house, car, watch or jewellery?
An ordinary prize is generally a windfall rather than taxable earnings. What happens later depends on the asset: private cars are generally CGT-exempt, watches can be exempt as wasting assets, while jewellery, art and houses can create Capital Gains Tax or other tax issues when sold or used.
Are U.S. lottery winnings federally taxable?
Yes, for U.S. taxpayers they usually are. Federal tax may be withheld before the prize is paid, and the final amount owed is worked out on the tax return.
Is the 24% U.S. federal withholding rate the final tax rate?
Not necessarily. The 24% figure is a withholding rate for qualifying lottery payments, not a universal final tax rate. A winner's final federal liability depends on taxable income, filing status and other tax rules.
Do U.S. states tax lottery winnings?
Some do and some do not. Local taxes can also apply in a few places. Use the state calculator for the state you need.
What if a non-U.S. resident wins a U.S. lottery?
Different rules apply to non-U.S. residents. The IRS normally starts with 30% withholding on nonresident gambling winnings, but a tax treaty may reduce or remove it. State tax may still apply.
Are Australian lottery winnings taxed?
Usually not. Ordinary lottery and raffle prizes generally do not need to be declared as income in Australia. Income you later earn from the money can be taxed.
Are Canadian lottery winnings taxed?
Generally, no. Canada does not normally tax lottery winnings. Interest or other income earned from the money can be taxable.
How are major Spanish lottery prizes taxed?
For qualifying official Spanish lottery prizes, the current exempt amount is €40,000 and the portion above that threshold is subject to the special 20% levy. Shared prizes share the exemption in proportion to each person's participation.
General information, not personal tax advice. Tax can depend on where you live, where the ticket was bought, whether the prize is shared and how it is paid. For a large win, check the latest rules with the tax authority and a qualified tax adviser.