How do you work that out then? As that means they could claim all the value added tax back on the tickets they buy, paying £1.60 a ticket instead of £2. Giving them a massive unfair advantage on Lottery games. And then only paying the tax on the guaranteed winnings? Will have to check on that.
Incidentally I just seen that you should not give large sums as gifts to family or friends. As if you die within the next 7 years those gives will then be hit by a huge tax fee, which could mean the receivers of the gift having more of a financial crisis than before they received the money if they have spent a lot of it and can't pay the tax.
The loophole is to write a document pre-empting any lottery win, and nominating the benefactor, which means that the money becomes legally theirs rather than a gift in the first place.
By definition: Some ”professional gamblers” do carry on a trade, for example, where they receive appearance money for appearing on television programmes. They are providing a service to a customer (the television production company) for reward. Whether their gambling winnings are proceeds of that trade would depend upon the facts. (HMRC ID: BIM22017)
A professional gambler is someone who has no other vocation than the studying of his chosen betting opportunity in order to place bets to make money so that he may survive (basically, the reason why we work anyway). There is no VAT that can be redemeed from lottery tickets, especially as the ticket itself does not represent a VAT reciept. I'm the manager of a betting shop, and as far as I can see from my monthly figures, we don't have to pay any VAT. The tax that the gambler has to pay is income tax (as worked out by the end of the financial year).
Edit: As for charitable donations, I would be giving away £30-40 million.
Edit 2: One final thing I found in the HMRC website... 'Any gifts you make to individuals will be exempt from Inheritance Tax as long as you live for seven years after making the gift. These sorts of gifts are known as 'Potentially Exempt Transfers' (PETs)... ...However, if you die within seven years of making a gift and the gift is valued at more than the Inheritance Tax threshold, Inheritance Tax will need to be paid on its value, either by the person receiving the gift or by the representatives of the estate. If you die between three and seven years after making a gift, and the total value of gifts that you made is over the threshold, any Inheritance Tax due on the gift is reduced on a sliding scale. This is known as 'Taper Relief'.'
Wow, I'd never thought I'd find myself trawling the HMRC website to find out about giving money...
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