Tax-free lottery winnings between countries?

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Forums › Finance and wealth management › Tax-free lottery winnings between countries?

Rikkitic

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#190897 15-Jan-2016 14:09

If you win the lottery here, it is tax-free. If you win the lottery in America, it is also tax-free there. So if a Kiwi wins a billion dollars in the USA, is it tax-free when she comes home?

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Wheelbarrow01

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Chorus

#1471954 15-Jan-2016 14:13

Assuming your facts are right, would you not be better to keep the funds in a US bank account and use a Visa Debit from that country to pay for everything?

Having said that, I was under the impression that US lottery winnings are indeed subject to tax, especially if taken in a lump sum.

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Geektastic

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#1471961 15-Jan-2016 14:25

It isn't tax free in the USA, at least according to my brother who lives there.

You can take the big pile and pay tax or you can opt for a smaller amount paid annually as an annuity which is tax free.

slingynz

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#1471962 15-Jan-2016 14:26

Some states may not have lottery windfall taxes, however you will still have to pay 30% - 40% federal income tax.

TG09

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#1473571 18-Jan-2016 10:29

Was reading about this the other day, the US gets taxed a lot. There are also only 4 - 5 states that do not get taxed for Personal Income Tax.

So the if there was one winner of the $1.5B and they took it all out in one go, they would of taken home about $650m.

Federal Tax

Personal Income Tax

I think some other tax as well.

In NZ our winnings do get taxed but it is already taken out before we get it.

wellygary

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#1473582 18-Jan-2016 10:42

TG09: In NZ our winnings do get taxed but it is already taken out before we get it.

Bzzt. wrong answer

There is no tax on winnings in lotto in nz

source: https://mylotto.co.nz/assets/dynamic_templates/Winning-Experience/images/Lotto-NZ-Winners-Book-2015.pdf

Tax
You don’t have to pay tax on your prize money, but you will have to pay tax on any interest you earn from the money.

TG09

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#1473592 18-Jan-2016 10:50

wellygary:
TG09: In NZ our winnings do get taxed but it is already taken out before we get it.
Bzzt. wrong answer There is no tax on winnings in lotto in nz source: https://mylotto.co.nz/assets/dynamic_templates/Winning-Experience/images/Lotto-NZ-Winners-Book-2015.pdf Tax
You don’t have to pay tax on your prize money, but you will have to pay tax on any interest you earn from the money.

Bzzt.

Fair enough I was just repeating from what someone told me.

Batman

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#1473645 18-Jan-2016 11:33

You want to buy US lottery?

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lchiu7

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#1473894 18-Jan-2016 15:33

I bought a few while I was there. Made $7 on a $20 purchase and then $4 on a $20 purchase :-(

Staying in Wellington. Check out my AirBnB in the Wellington CBD. https://www.airbnb.co.nz/h/wellycbd PM me and mention GZ to get a 15% discount and no AirBnB charges.

andrew027

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#1473923 18-Jan-2016 15:52

joker97: You want to buy US lottery?

I'm not buying a ticket in the US lottery until I get the £7,000,000 I won in the EuroMillions lottery. I've paid the £250 to have my prize released, so I should get my winnings any day now...

Rikkitic: If you win the lottery here, it is tax-free. If you win the lottery in America, it is also tax-free there. So if a Kiwi wins a billion dollars in the USA, is it tax-free when she comes home?

You don't pay tax on lotto winnings here in New Zealand. When you win the lottery in the United States you do pay federal income tax on the winnings and there are additional taxes in some states as well (not all). When you transfer money from the US to NZ you don't pay tax to bring the money in. However, as I understand it, if you are a New Zealand resident for tax purposes Inland Revenue may require tax be paid on income earned overseas, but if tax has already been paid on the income overseas you can get a tax credit for this.