Coming into a good amount of money can have a huge impact, whether this is from a successful change in salary, an inheritance, or in some instances a big win at the casino or the lottery. Depending on where this windfall comes from, however, it can be subject to different tax rules and different taxation amounts depending where the player and the service may be and understanding taxation rules on winnings can avoid disappointment further down the line when it comes to deducting from the winnings.
The UK is one of the better countries for this – as one of the biggest gambling markets in the world it has a huge number of players that could come into a sudden windfall that can be lifechanging – and it’s also one of the few countries in the world that don’t tax any winnings through casino wins or through the lottery. There have been some headlines in recent years that could suggest a change in the future to come more in line with other countries, but for now if a player wins in the UK, they get to keep the entire amount – the only notable change here is that some bigger winnings may offer a smaller amount as a lump sum or a full amount in a yearly pay-out.
On the other hand, the US can be much more restrictive in this sense and there are plenty of stories out there for the different taxation rates in different states – lucky players who’ve won the lottery or the power ball roll-over for hundreds of millions or in the biggest case a billion dollars but would see over 50% taken away for tax. Whilst this is a big downside, losses can also be filed as deductibles on yearly tax forms which could help reduce losses for some players, and option that isn’t available to players in the UK.
There are a few other countries that sit in the middle with the likes of Canada and Australia – for the most part recreational gambling isn’t subject to tax for the reason that the winnings can be considered a spot of good luck, but in the former professionally players may be subject to taxation as the winnings can be considered earnings from a professional vocation rather than earnings from a hobby, and there is often a clear distinction between the two – given how often these laws change it could be something that changes regularly. For players looking to make the most, this does show where the biggest winnings or losses can be found, and something to keep in mind with the next big gambling holiday.