Lotto Family Syndicates

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lukas888

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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.
 
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
 
Sorry I should have added if they win big and
Gift a large amount to a son or daughter.
 
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.
 
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?
 
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 :)
 
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℅.
 
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.
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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.
 
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.
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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.
 
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.
 
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.
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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 .
 
I think now is the time for a poster to put up a template for a syndicate document. Maybe they exist on Lotto website.
 
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.
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I know your a very knowledgeable accountant but are you certain?I understood that you could only gift 325k once every 7 years .
 
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.
Click to expand...

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.
 
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 .
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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.
 
Gordon Gekko said:
No, it's tax evasion, plain and simple.
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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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