Are Lottery Winnings Taxed in Australia
If you win lotto, is it regarded as taxable income?
So we would all like to win lotto, right? I was thinking the other day whether if I won lotto here in Australia, whether I would have to pay a large portion of those lottery winnings to the ATO as part of my tax return.
So I did some digging, and the answer is a brilliant and resounding ‘NO!’.
If you win the big bopper, $50 million say, you are entitled to that whole amount and the ATO will not take a cent! How about that! I received this news with great excitement (even though I have never won Lotto [there is always hope]).
To quote the Australian Tax Office directly from the section, ‘Guide to Income you must Declare’:
“Do not declare prizes won in ordinary lotteries – for example, lotto draws, caskets and raffles.”
And to further quote from ozlotteries.com from the FAQ under the section, ‘Do I pay tax on my winnings?’:
“No tax is levied on winnings in Australia. However, it is the client's responsibility to abide by any relevant tax laws in their jurisdiction.”
So there we have it, if you ever win the big bucks, rest assured that the ATO will not be taking a slice of your winnings pie.
Once your lotto winnings start to generate income however, well that is another story… but we can all only wish to experience THAT particular tax problem.