UK tax on gambling and lottery winnings 2026/27
Gambling and lottery winnings are not taxed in the UK in 2026/27. What is still taxed: interest on winnings, IHT, employer prizes and US withholding.
Gambling and lottery winnings are not taxed in the UK: HMRC treats betting as not being a trade, and collects tax from operators through gambling duties instead. What can still be taxed is what happens next: interest the money earns, Inheritance Tax if you die holding it, crypto gains, and prizes that come from an employer rather than a game of chance.
At a glance
| Type | Tax on the winner | Operator duty |
|---|---|---|
| National Lottery | None | 12% Lottery Duty |
| Online casino games | None | 40% Remote Gaming Duty from 1 April 2026 |
| Sports betting | None | 15% General Betting Duty; 25% on most remote betting from 1 April 2027 |
| Bingo | None | Bingo Duty abolished from 1 April 2026 |
| Premium Bond prizes | None | Not applicable |
| Interest on winnings | Taxable above your savings allowances | Not applicable |
| Prize from your employer | Income Tax and NIC | Not applicable |
Inheritance Tax on winnings: illustrations
Assumes no lifetime gifts, no reliefs and no unused band transferred from a spouse.
| Estate | Nil-rate bands | IHT at 40% |
|---|---|---|
| £1,100,000 estate, single, home left to children | £500,000 | £240,000 |
| £1,100,000 estate, single, no home to descendants | £325,000 | £310,000 |
| £5,000,000 estate, single, home left to children | £325,000 | £1,870,000 |
Frequently asked questions
Are UK gambling and lottery winnings taxable?
No. HMRC's guidance (BIM22015) is that betting and gambling, as such, are not trading, so a punter is not taxed on winnings, whether from the National Lottery, a casino, a bookmaker, bingo or poker. The same guidance says a person placing a spread bet is not normally carrying on a trade. The tax is collected from operators instead, through gambling duties such as Lottery Duty and General Betting Duty.
Which duties do gambling operators pay?
Lottery Duty is 12% and General Betting Duty is 15% on fixed-odds and totalisator bets. Remote Gaming Duty rose from 21% to 40% from 1 April 2026, and Bingo Duty was abolished from the same date. From 1 April 2027 a new 25% General Betting Duty rate applies to remote betting, except remote bets on UK horse racing and bets on self-service terminals in licensed premises.
Is interest on winnings taxed?
Yes. The win itself is tax-free, but interest it earns in a bank account is savings income. You can have up to £5,000 at the starting rate for savings if your other income is low, and the Personal Savings Allowance of £1,000 (basic rate), £500 (higher rate) or £0 (additional rate). Interest above those is taxed at your rate. Interest inside an ISA, and Premium Bond prizes, are tax-free.
Is Inheritance Tax due on lottery winnings?
Winnings you still hold when you die are part of your estate. Inheritance Tax is charged at 40% on the estate above the £325,000 nil-rate band, plus the £175,000 residence nil-rate band if a home goes to direct descendants; that band is reduced by £1 for every £2 of estate over £2,000,000. Gifts are potentially exempt if you survive 7 years, and some gifts are exempt at once, such as the £3,000 annual exemption, gifts to a spouse or civil partner, and regular gifts out of surplus income.
Are professional gamblers taxed on their winnings?
Rarely. The leading case, Graham v Green (1925), held that betting is not a trade, and HMRC's manual says that decision has stood the test of time. What can be taxed is income around the gambling: sponsorship and appearance fees, selling tips, or an organised activity that makes profits out of the gambling public, which HMRC says will normally be trading.
How is a prize from an employer taxed?
A prize given because of your job, such as a sales-contest reward, is earnings or a taxable benefit, not a gambling win. Cash goes through payroll with Income Tax and National Insurance; a non-cash prize is usually a taxable benefit with employer Class 1A NIC. A prize from a newspaper competition or a TV quiz that has nothing to do with your work is not taxed.
Are foreign gambling winnings taxed in the UK?
The UK does not tax gambling winnings won abroad either, but the other country may. The United States withholds 30% from many payments to non-resident aliens. The US Treasury's technical explanation of the UK-US treaty says Article 22 (Other Income) gives the right to tax such income to the country of residence, so a UK resident can usually reclaim the US federal tax; state taxes are separate. Take advice on the US forms before you claim.
What about crypto won by gambling?
The win itself is treated like any other gambling win. But crypto you receive is an asset: when you later sell, swap or spend it, Capital Gains Tax can be due on any rise in value since you received it, using its value at that point as the cost.
Do lottery syndicates have tax problems?
Each member's share of a genuine syndicate win is their own winnings and is not taxed. Keep a written syndicate agreement and records of who paid in: without them, money paid out by the ticket holder to the others could be treated as a gift by that person for Inheritance Tax.
Are Premium Bond prizes tax-free?
Yes. NS&I says Premium Bond prizes, from £25 to £1 million, are tax-free. You can hold up to £50,000. Once a prize is paid into an ordinary bank account, any interest it then earns is taxable in the usual way.
Who runs the National Lottery now?
Allwyn has run the National Lottery under the fourth licence since 1 February 2024, taking over from Camelot, according to the Gambling Commission. Large winners can ask the operator about its support for winners, including whether publicity is optional.