Do you pay tax on lottery winnings?

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Section 82(2) of the Capital Acquisitions Tax Consolidation Act 2003 allows an exemption for the receipt of any winnings in a lottery and Section 63 of the Finance Act 2021 has now extended this to include non-cash winnings.

Lottery winnings are tax free but any income earned on those winnings is taxable and should a winner choose to gift some cash to their relatives or friends, those recipients will have to pay gift tax or Capital Acquisitions Tax on the money.  Therefore clever planning by your legal and financial advisors can help minimise tax while ensuring those you wish to benefit receive the maximum.