Are UK lottery winnings taxed? The UK rules and what happens if you live abroad

In the UK: nothing to pay

Winnings from the National Lottery, bookmakers, casinos and scratchcards are not taxable income in the UK: HMRC takes no Income Tax or National Insurance on them, and the operator pays its own Lottery Duty on ticket sales. You receive the full amount and do not report it on a tax return. The same applies to visitors who bought a ticket while in the UK.

What you do with the money afterwards is taxed normally:

• interest and gains from savings, bonds or shares bought with the prize follow the usual rules (Personal Savings Allowance, ISAs, Capital Gains Tax);
• gifts to family are tax-free when made, but amounts above the £3,000 annual exemption count towards your estate if you die within 7 years (Inheritance Tax at 40% above the £325,000 threshold);
• a syndicate win should be split under a syndicate agreement written before the draw; HMRC then does not treat the shares as gifts.

Abroad: it depends on your tax residence

If you live in the UK permanently and are UK tax resident, your home country's tax office normally has no claim on a UK lottery prize. If you are still tax resident elsewhere (seasonal work in the UK, family at home, or a ticket bought while visiting), the prize may be taxable there as foreign income.

Poland as an example. A Polish tax resident (centre of personal or economic interests in Poland, or more than 183 days a year there) must declare a UK lottery win in Poland. The Polish exemption for small lottery wins (up to 2,280 zł) and the flat 10% rate apply only to games run in EU or EEA countries, and the UK has not been one since 1 January 2021. The win is therefore "other income" taxed on the progressive scale (12%, and 32% above 120,000 zł a year), declared on the PIT-36 return with the PIT/ZG attachment by 30 April of the following year, converted at the National Bank of Poland rate of the day before the money arrived. The Poland–UK double taxation treaty gives such income to the country of residence only, so there is no double taxation, but also nothing to credit, because the UK took nothing.

A transfer of the prize to a foreign bank account or a move abroad later is not itself taxed; residence on the day of the win is what counts. Gifts to close family may be exempt at home under local rules (in Poland: notification within 6 months and a bank transfer, not cash).