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TonyTax
TonyTax, Tax Consultant
Category: Tax
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I need to clarify as i am a UK RESIDENT am i eligible to pay

Customer Question

I need to clarify as i am a UK RESIDENT am i eligible to pay any tax on prize money if i have won through the aviation company forI (nsurance Bond Certificate and Award Winning Certificate) outside EEC into the UK through wire transfer and is there a charge from my receiving bank that they will change or Cheque to be deposited into my account. If there is a tax how much is it as i have already paid the inland revenue at the receiving end for release.
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.

Hi.

Can you give me some more detail about the competition you won a sum of money from please. How much have you won? How did you pay the release fee? How much was this exactly?

Customer: replied 1 year ago.

Hi Thank you for your swift response. as i explained, this award prize money was in relation to a prize draw or raffle as i can put it based on my email address as i purchased a ticket this year to South America by an IATA Travel Agent. This was a draw or Promotion from ARAB AIR CARRIERS ORGANISATION where 50 people around the world have won. The amount in question is £700,000. I have to pay the Inland Revenue a total of £5,500. This is a tax which i have to pay which will then allow me to either collect the cheque outside the EEC or through wire transfer to my Bank. The amount as mentioned, has been deposited in a Bank at the receiving end awaiting my confirmation. Kindly revert back. Thanks

Expert:  TonyTax replied 1 year ago.
Thanks. You wouldn't have to pay UK tax on the winnings but if you invested your winnings, any income produced by the investments would be taxable. I can't really help you with bank charges as different banks vary. However, whenever I have wired money abroad, the wire charges I paid were paid to the sending bank, not the receiving bank. You should certainly warn your bank in advance of a transfer of the size you mention being made to your bank as it will possibly trigger money laundering software into action. Any documentation you have in connection with the competition will serve as evidence of the origin of the money. I have to say this as a health warning. Many people come to this site and say they have won a large sum of money and that they have been asked to pay local taxes before the money can be released. I know there can be local taxes on lottery wins and the like but are you sure this is a genuine competition? You have been asked to pay £5,500 in taxes and you should be sure that you are not the target of a scam before parting with any cash. I hope this helps but let me know if you have any further questions.
Customer: replied 1 year ago.

Hi, Thanks This is genuine as i have the option to go directly and pay this . If did receive a cheque from the winning body and deposited it into my account, would that still be classified as money laundering. Based on the amount I've mentioned, how much is the tax percentage if you could advise me on that. Thanks and regards,

Expert:  TonyTax replied 1 year ago.
As I said in my answer, you won't pay UK tax on the winnings.

As far as money laundering is concerned, transfers many times larger than this one take place every day in business. All I was saying was to tell your bank in advance that you are about to have £700,000 deposited into your account and be able to prove how you came to have that much money. There is nothing to worry about.

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