Tax on Prize Money

[ronnieotoole]

Hi,

I hope someone can help. Is tax liable on prize money, and are there limits? Does it matter if the prize money is won for artistic merit vs pure chance?

Thanks

Connie

 

[Gulliver]

It's a fairly complex area - for example some examples:-

1... Prize money won by a professional in the course of his profession is taxable. This would apply to the case of a professional golfer, temmis player, etc. but could also apply to someone who competes professionally in artistic merit competition - e.g. professional dancer, ice skater, etc.

2... Prize money won from a source outside the country e.g. a foreign lottery is taxable

3... Prize money won by a professional gambler, including prize money won in games of chance is taxable i.e. he/she is taxable on the net annual income from this source