Theres no tax on gambling winnings in the uk , but what if you won in Las Vegas

"Dave T" wrote

The 12% "lottery Duty" paid to the government sounds just like a tax to me...

Oh i did not no that , but gambling at casinos then , what if you won a large sum in another country , say america , would the money become taxable ?

Since the oldest trick in the book, by tax evaders, is to allege that the source of sudden wealth was gambling winnings, you would need to show your friendly Tax Inspector some solid proof.

Is that not backwards logic? The more relevant figure would be the proportion of people who claim it is gambling winnings are doing so falsely. Even if 99.99% of people who (attempt to) commit some wrongdoing claim X but these account for only 0.01% of the people who claim X (the other 99.99% being genuine claims), then claiming X should not be considered sufficient grounds for suspicion of committing that wrongdoing.

I wonder why gambling winnings are non-taxable. Seems crazy to me not to tax unearned income of this type.

"mike o'sullivan" wrote

Perhaps the same reason as there's no CGT on (normal) cars -- they'd have to give tax relief on losses, if they taxed the gains, and there are (usually) more losses than gains!

Exactly, and in a sense therefore winnings aren't really "unearned income" at all. They have been "earned" by tremendous risk-taking. Just the same as embarking on a business venture.

Although if the bank pays me interest - I pay tax on it. If the bank charges me interest - I don't get any tax relief on it. (Since death of MIRAS anyway)

But why could not losing bets be offset against winning bets in the same tax year, in the same way that CGT is calculated?

"Ronald Raygun" wrote

Hmmm. Are you saying that business profits should not be taxed either? ;-)

You would pay 30% tax on it in the US.

Or indeed, like with CGT, carried forward to be set against winnings in future years?

Not if they dollar bills stuffed into a suitcase. But I would be wary of the baggage handlers who might need a cut..

And you can't lock suitcases when you fly back from the States!