If you win lotto and give some away do you have to pay tax?

A fellow workers retired elderly parent won lotto a while ago, just over a million dollars.

Anyway they purchased a unit as PPOR 400k (lived with one son prior to this)
Brought a car eg. 30k
Gave 125K to grandkids
Giving 300k to 3 kids
Shouted a holiday for one daughter + some clothes

The parent is over 65 years of age was not well off before this.

I believed that years ago if you gave away over 10K (from an inheritance eg will) to someone else you had to pay tax.

Anyone got an idea if tax has to be paid when giving away lotto winnings?

Because I am thinking....

1,300,000 - 400,000, - 30,000 - 125,000 - 300,000 = $ 445,000 to live on.

445,000 invested at 4.3% = $19,135 which is better than the pension but...


Thanks
 
No tax, but tehy wont be recieving any government support for 5 years. Silly thing to do with giving the money away. Could of set themself up nicely with say a trust where by they get the income and say the kids get the capital later on.

Its strange, this always happens when people win lotto.
 
I don't think lotto winnings are taxable.

But if grandpa hav money to somebody else, that income is possibly taxable to the recipient.

With that much money he can afford to ask advice and not rely on people like me who don't really know the answer ;-)
 
No tax, but tehy wont be recieving any government support for 5 years. Silly thing to do with giving the money away. Could of set themself up nicely with say a trust where by they get the income and say the kids get the capital later on.

Its strange, this always happens when people win lotto.

Agree.

No tax but will impact any government assistance that they may require in the future.

Cheers
 
It mightn't be what I would do with the money - But I don't think there is anything wrong with what they have done with it. It is a winfall after all, not like it was part of their expectant retirement plan. They wanted to share what they won with those they love - nothing wrong with that. It is nice they want to share.

Now personally, I am quite a bit selfish :D and would definitely be putting it towards different uses.
 
It mightn't be what I would do with the money - But I don't think there is anything wrong with what they have done with it. It is a winfall after all, not like it was part of their expectant retirement plan. They wanted to share what they won with those they love - nothing wrong with that. It is nice they want to share.

Now personally, I am quite a bit selfish :D and would definitely be putting it towards different uses.

But if there plan was the age pension they are now up the creek
 
There are no gift taxes.

This person possibly spent the money in the best way HE/SHE felt appropriate. After all, this person now fully owns a PPOR and car, and has $445K to live on. Centrelink may class the remainder as deprived income, but that only lasts for 5 years. $445K will last well beyond this, and after 5 years the person can go on the pension. He/she will have a much more comfortable retirement even having gifted a large proportion of the windfall.

Good luck to all of them. Financial considerations aren't the be-all and end-all. Previously this person was living with a son, they sound like a very close family. If I am ever lucky enough to win serious money I would certainly share it around close relatives.
Marg
 
The parent is over 65 years of age was not well off before this.

....and by the looks of the wash-up, not that much better after it.



445,000 invested at 4.3% = $19,135 which is better than the pension but...


I don't reckon the 445K is too accurate. I reckon it would be far less than that, once all of the stamps etc on the house were paid, along with the holiday and the clothes.....I assume they weren't free as she apparently "shouted them".


If that pitiful figure of 4.3% p.a. is what she is earning on her funds from the Banks, then tell her I would happy to assume that role and give her a whopping 5.3% p.a. for the funds.....cos I am way more risky than Banks, so it's only fair I pay a 20% premium.
 
No Dazz- offer her the lower rate but throw in a free toaster- any higher interest rate will only interfere with her pension entitlements remember.
 
No tax, but tehy wont be recieving any government support for 5 years. Silly thing to do with giving the money away. Could of set themself up nicely with say a trust where by they get the income and say the kids get the capital later on.

Its strange, this always happens when people win lotto.

Does anyone know if the Tattslotto agencies provide financial advice for people who do win? Shaneelastic, your idea of a trust sounds like a good idea in this situation.

Regards Jason.
 
Top