# Lotto Family Syndicates



## lukas888 (2 Mar 2017)

Another large lotto won by a syndicate yesterday congratulations to all members.I find that
recently a lot of the large winners are family syndicates, i wonder how many are formed after the
fact.I know of no better way of passing on wealth to family with zero tax implications.A syndicate of unrelated members are subject to CAT limits etc.but a family syndicate can share
millions with no liability.Is it time for no limit gambling wins in a family syndicate scenario to be 
subject to some cap for tax purposes.OK i know jealousy is one of the seven deadly sins.


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## Delboy (2 Mar 2017)

As I understand it from hearing a lotto rep on the radio following the recent euro millions win, they advise winners to consider including family members on the win. But of course to have the shares/%'s clearly defined and agreed to before doing so.

Makes sense to me


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## llgon (2 Mar 2017)

lukas888 said:


> A syndicate of unrelated members are subject to CAT limits etc.



Don't think this is true - any references?


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## lukas888 (2 Mar 2017)

Sorry I should have added if they win big and
Gift a large amount to a son or daughter.


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## Gordon Gekko (3 Mar 2017)

I suspect that this is true. If a parent wins, he/she should think about forming a syndicate after the fact, but that is tax evasion and would in theory trigger a tax issue.


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## Ceist Beag (3 Mar 2017)

Sorry OP but that is such a small minded view of this. To suggest that there should be a CAP on winnings if the syndicate is made up of family members smacks of nothing other than begrudgery. I see no reason why any of these winnings should be taxed based on who is receiving them. Good luck to the winners and personally, the more to share in the winnings the better.
Whatever about the moralities of it, is there any way of proving whether a syndicate was formed before or after the win?


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## Monbretia (3 Mar 2017)

To be honest I think if I won 12m I wouldn't mind paying the bit of tax on whatever gifts I was giving, well upping the gift to cover the tax if you follow


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## lukas888 (3 Mar 2017)

Ceist Beag you are missing my main point.If for example a mother of two children wins 12 million forms a family syndicate no tax implications no matter how high the percentage of winnings the children receive.Contrast that with a unrelated work syndicate and any family gifts are subject to regular tax limits.Another point apart from Ireland and the UK most countries including the US tax all gambling wins at rates of up to 30℅.


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## Bronte (3 Mar 2017)

Gordon Gekko said:


> I suspect that this is true. If a parent wins, he/she should think about forming a syndicate after the fact, but that is tax evasion and would in theory trigger a tax issue.



Which is why I of course have agreed with all my siblings they will get 100K each if I win a couple of million. But I'll be drawing that up in writing prior to them signing the back of the ticket. 

I would imagine after the high profile court case the lotto staff will refuse to give any advice to winners. And that case is going to appeal.  Ding a ling a ling for the lawyers.


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## Jazz01 (3 Mar 2017)

Bronte said:


> Which is why I of course have agreed with all my siblings they will get 100K each if I win a couple of million. But I'll be drawing that up in writing prior to them signing the back of the ticket.


I assumed that once you have signed the back of a winning lotto ticket, you are eligible for an equal share of the prize with everyone else who have signed it - regardless of what other "documents" were drawn up / agreed.


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## Bronte (3 Mar 2017)

Jazz you are allowed draw up syndicate agreements, that is a legally binding document and it can allow different shares to be allocated.  So normally signing the ticket means it's equal shares, if you have a legal document stating that for example 2 people get 50% and 5 people get 10% each, that is what a court would look at.


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## T McGibney (3 Mar 2017)

The UK doesn't tax gifts at all. In Ireland we wallow in begrudgery every time someone has a stroke of good fortune.


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## DirectDevil (3 Mar 2017)

Jazz01 said:


> I assumed that once you have signed the back of a winning lotto ticket, you are eligible for an equal share of the prize with everyone else who have signed it - regardless of what other "documents" were drawn up / agreed.



If there is a syndicate then all beneficiaries of the win may not be able to sign the ticket physically i.e. no room. However, if the syndicate agreement is worded properly should one person not be able to sign it as the nominee of or agent of or trustee for the rest of the syndicate ? This would require the syndicate agreement to be unequivocally clear that any signatory of the ticket is acting in that capacity. It would need to also cover the situation where any member of the syndicate buys a winning lottery ticket in their own right as distinct from being a member of the syndicate - otherwise a winning set of syndicate numbers might be passed off by an individual as being his !  

In relation to the _tax evasion_ issue it strikes me that retrospective syndicate formation is actually quick, slick and legitimate _tax avoidance_. Some may regard that as morally reprehensible but it is a debateable point.

Don't forget that if someone ends up receiving a cash gift from a lotto winner - as distinct from being a member of the syndicate - that gift might not be chargeable to CAT if below the relevant threshold but it might add to the recipient's aggregate lifetime running total of gifts received for CAT purposes .


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## Bronte (3 Mar 2017)

I think now is the time for a poster to put up a template for a syndicate document.  Maybe they exist on Lotto website.


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## lukas888 (3 Mar 2017)

T McGibney said:


> The UK doesn't tax gifts at all. In Ireland we wallow in begrudgery every time someone has a stroke of good fortune.


I know your a very knowledgeable accountant but are you certain?I understood that you could only gift 325k once every 7 years .


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## cremeegg (3 Mar 2017)

lukas888 said:


> Another large lotto won by a syndicate yesterday congratulations to all members.I find that
> recently a lot of the large winners are family syndicates, i wonder how many are formed after the
> fact.I know of no better way of passing on wealth to family with zero tax implications.



Well after all the threads on here with families tearing themselves apart over money, its nice to hear of a family looking out for each other. Good luck to them.


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## Gordon Gekko (3 Mar 2017)

lukas888 said:


> I know your a very knowledgeable accountant but are you certain?I understood that you could only gift 325k once every 7 years .



No, that's mixing gifts and inheritances.

Broadly, the estate gets taxed over and above £325k when someone dies and gifts aren't taxable if the donor lives for seven years.


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## Gordon Gekko (3 Mar 2017)

DirectDevil said:


> In relation to the _tax evasion_ issue it strikes me that retrospective syndicate formation is actually quick, slick and legitimate _tax avoidance_. Some may regard that as morally reprehensible but it is a debateable point



No, it's tax evasion, plain and simple.


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## Steven Barrett (3 Mar 2017)

Gordon Gekko said:


> No, it's tax evasion, plain and simple.



It is. But how many parents gift money to their kids, cars, house deposits etc and say nothing to the Revenue? It goes on all the time. I am sure the Revenue know fine well that people are drawing up agreements post win. You'd only have to have a look at the way the syndicate it drawn up. I have never been part of a syndicate that wasn't anything other but a straight split between all the members. If the Revenue are seeing on that gives 3% to siblings, 10% to parents and one member gets the bulk of it, it's pretty obvious what's going on. I don't think the Revenue have the appetite to go after lotto winners. Sure they'll pay it back in the stamp duty they pay on the massive houses* they'll all buy 


*Gorse Hill is on the market for €8.5m!


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## DirectDevil (4 Mar 2017)

Bronte said:


> I think now is the time for a poster to put up a template for a syndicate document.  Maybe they exist on Lotto website.



Link https://www.lottery.ie/useful-info/syndicates


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## DirectDevil (4 Mar 2017)

Gordon Gekko said:


> No, it's tax evasion, plain and simple.



Out of interest at what point in time would the act (retrospective formation of a syndicate) become one of tax evasion ?

If the opportunity to engage in retrospective syndicate formation is available before payment of winnings occurs could that not be used as a valid mechanism of tax avoidance ? Otherwise, the only certain way to counter this would be for a syndicate to formulate it's agreement and to lodge it somewhere, on a formal basis, so that retrospective syndicate formation could not occur.


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## Gordon Gekko (4 Mar 2017)

It's tax evasion, end of story.

If I buy a ticket and I've the winning numbers in a €12m draw, I have an asset worth (say) €12m.

Retrospective syndicate formation is just like backdating of almost any kind; it's dodgy. Forming a four person syndicate after the fact in my €12m example is simply a sham to evade €3m of Capital Acquisitions Tax.


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## DirectDevil (6 Mar 2017)

Gordon Gekko said:


> It's tax evasion, end of story.
> 
> If I buy a ticket and I've the winning numbers in a €12m draw, I have an asset worth (say) €12m.
> 
> Retrospective syndicate formation is just like backdating of almost any kind; it's dodgy. Forming a four person syndicate after the fact in my €12m example is simply a sham to evade €3m of Capital Acquisitions Tax.



I am inclined to agree with you that it is indeed dodgy and a sham.

Personally, I would be disinclined to join such a scheme as I would fear leaving myself open to a charge of fraud or conspiracy to defraud. However, the question is whether or not it would be legitimate as far as Revenue are concerned. I use "legitimate" in the sense of being one of those exercises where Revenue know or suspect exactly what you have done but cannot establish the accusation !

Out of interest, do Revenue ever investigate large lottery "syndicate" wins with a view to mind to establishing if there is provable fraud or conspiracy to defraud based on retrospective syndicate formation ?  Do Revenue or the Gardai have any legal authority to conduct such an investigation ?


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## T McGibney (6 Mar 2017)

DirectDevil said:


> Out of interest, do Revenue ever investigate large lottery "syndicate" wins with a view to mind to establishing if there is provable fraud or conspiracy to defraud based on retrospective syndicate formation ?  Do Revenue or the Gardai have any legal authority to conduct such an investigation ?



Good luck with that one.  Thankfully we don't live in a fascist state where the presumption of innocence counts for nothing.


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## lukas888 (6 Mar 2017)

I see no reason for the Gardai to get involved in what is purely a tax evasion scenario.The revenue could definitely ask a lot of questions, but proving any wrongdoing would be very difficult.


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