TL;DR
Lottery winnings in the UK including Euromillions are completely tax-free. HMRC does not treat them as income and no capital gains tax applies on the win itself. However, interest earned on the money, investment returns, and the value of the estate at death can all trigger tax. Large winners typically need a financial adviser, a revised will, and a strategy for gifts to family.
Last reviewed: 6 June 2026
The Euromillions draw, operated by Camelot in the UK as part of the pan-European lottery, regularly produces jackpots running to tens of millions of pounds. For UK winners, the question of tax is straightforward on the win itself: the lump sum is entirely free of UK income tax and capital gains tax. HMRC has confirmed this position consistently. What happens to the money after the win is a different matter.
Key Facts
- UK lottery winnings: 100 per cent tax-free (no income tax, no CGT)
- Euromillions is a transnational lottery: UK winners pay no UK tax on the prize
- Interest on winnings held in a savings account: taxable as income above the personal savings allowance
- Personal savings allowance (basic rate taxpayers): £1,000 per year
- Personal savings allowance (higher rate taxpayers): £500 per year
- Capital gains tax annual exempt amount: £3,000
- Inheritance tax nil-rate band: £325,000
- Gift to a spouse or civil partner: immediately exempt from inheritance tax
Why lottery winnings are not taxed in the UK
HMRC classifies lottery winnings as a windfall, not as income from employment, self-employment, or investment. Because the win does not arise from any economic activity, income tax does not apply. Capital gains tax does not apply on the win either because no asset has been disposed of to generate the gain.
This treatment applies to all UK National Lottery games, Euromillions, and to most foreign lottery prizes received by UK residents, subject to any double-taxation agreement in force with the country running the lottery.
Where tax does apply after the win
Money sitting in a savings account earns interest, and that interest is taxable income. A £10 million jackpot held in a 4 per cent savings account generates £400,000 of interest per year. After the personal savings allowance (£500 for higher-rate taxpayers), the remainder is taxable at the applicable income tax rate, up to 45 per cent for additional-rate taxpayers.
If the winner invests in shares, funds or property and makes a gain on disposal, capital gains tax applies on gains above the annual exempt amount of £3,000. Investment income from dividends is taxable above the dividend allowance of £500.
At death, the value of the estate is included in the inheritance tax calculation. A winner who holds £10 million at death and has used neither the nil-rate band, the residence nil-rate band nor any charitable exemptions faces an inheritance tax bill of approximately £3.9 million on a straightforward estate.
Gifting winnings to family
A winner can give money to family and friends without immediate tax consequences in most cases. However, gifts of more than £3,000 per tax year to individuals other than a spouse or civil partner may be subject to inheritance tax if the donor dies within seven years. These are known as potentially exempt transfers.
Gifts to a spouse or civil partner are exempt from inheritance tax without limit. Gifts to registered charities qualify for gift aid if made through the Gift Aid scheme, allowing the charity to claim an additional 25p per pound from HMRC.
Practical financial steps for a large windfall
Taking independent financial advice before doing anything with the money is the first step almost all financial planning bodies recommend. A qualified independent financial adviser regulated by the FCA can help structure the investment of winnings in a way that minimises future tax exposure.
Using the annual ISA allowance (currently £20,000 per person per year) shelters savings interest and investment returns from tax inside the wrapper. A couple can shelter £40,000 per year between them. A stocks and shares ISA can grow free of capital gains tax and income tax indefinitely.
Updating or making a will as soon as possible after a large win is advisable. A will can include nil-rate band trusts, spousal exemption provisions, and charitable legacies, each of which can reduce the inheritance tax exposure of the estate.
Editor’s note: The tax treatment of lottery winnings has not changed in recent years, but broader personal tax rates, allowances and thresholds change annually in the Budget. Any financial plan built around a lottery win should be reviewed after each Budget.
Related guides
Disclaimer: This article is for general information only. It does not constitute tax or financial advice. Tax treatment depends on individual circumstances and may change. Readers should consult an FCA-regulated financial adviser or a qualified tax adviser before making decisions on the basis of this information.
Frequently asked questions
Do you pay tax on Euromillions winnings in the UK?
No. Euromillions and all other UK lottery prize winnings are completely exempt from income tax and capital gains tax in the UK. HMRC does not treat the win itself as taxable income.
Do I pay tax on the interest earned on my lottery winnings?
Yes. Interest earned on savings held after the win is taxable income above the personal savings allowance, which is £1,000 for basic-rate taxpayers and £500 for higher-rate taxpayers. Additional-rate taxpayers have no personal savings allowance.
Can I give my lottery winnings to family tax-free?
You can give money to family without immediate tax consequences, but gifts above £3,000 per year to people other than your spouse or civil partner may be subject to inheritance tax if you die within seven years. These are called potentially exempt transfers.
Does winning the lottery affect my benefits?
Yes. A large lottery win is treated as capital for means-tested benefit purposes. Universal Credit, Housing Benefit and Council Tax Reduction are all means-tested. Holding significant capital disqualifies a claimant from these benefits. The rules differ for non-means-tested benefits such as the State Pension.
Sources
- HMRC, Income Tax: what is taxable and what is not (gov.uk)
- HMRC, Capital Gains Tax: what you pay it on, rates and allowances (gov.uk)
- HMRC, Inheritance Tax: thresholds, rates and who pays (gov.uk)
- HMRC, Tax on savings interest (gov.uk)
- National Lottery, Euromillions: how prizes work (national-lottery.co.uk)
- Financial Conduct Authority, Choosing a financial adviser (fca.org.uk)
