|Posted: February 22, 2010, 4:52 am - IP Logged|
"British couple who won a £56 million (US$88 million) Euro Millions lottery."
"The couple, who would make around £47,000 a week in interest if they banked all their jackpot,"
I wonder how the Euro Lottery and the UK deal with taxes. The article doesn't go into their calculations and how they arrive at their figures. The article also doesn't explain whether the Euro winners are given a choice on whether they can collect all their winnings up front or if they are divided into payments.
We know, in the USA, the federal government and most states tax their winners. California is one state which does not tax winnings. However, even in California, the stated jackpot amount is divided over some 26 years. If a winner wants all the winnings upfront, he only get about 50%. In general, if a California lotto winner wants all their winnings immediately, he gets about 1/3 after taxes.
With the UK lottery there is no instalement pay out system, the winner gets a one time pay out, plus the winning is tax free, the only time these winners would have to pay tax is when they die, who ever they leave their fortune to is then taxed 40% (40% inheritance tax) of whatever this couple or other big lottery winners leave in their will.
The interest this couple gets is from their private banking, as they can't hold a normal bank account with this money as normal current accounts pay a lower interest, with private banking the interest is a lot higher, and that why it states the figure shown, plus this figure of £47,000 is only paid once the winners come forward to collect their cheque, if the winner waits a month or 2 months later to collect their winnings, they would have lost out on this interest being paid into their bank account.
All winners in the UK are entitled to opt in or out as to whether they would like to go public with their winnings, if the opt out no publicity is printed about them and their identity is kept a secret.