How does Lotto payout large winnings ?

Lebogang95

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I was listening to the radio on my way to work & an ad came on about the winner of the R200 Million Lotto. Or whatever it was.

I was just wondering, granted the winner decided to take the cash as opposed to an annuity how will that R200 Million be paid out to him ?

I imagine it's not as easy as dumping the money into his account and calling it a day. Would the winner need to communicate with his bank for a special account with which his money can be handled ? It will obviously be taxed but what processes are there to handle this large payout thereafter ?
 

Hamster

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Why or how is it not taxed ?
It is not considered regular income and it is free from capital gains tax.

I'm assuming the reason for it being CGT free could be because it originated from nothing, ie. it is new capital. Any interest you gain from it though or large donations you make will be taxable.
 

theratman

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themba990

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I was listening to the radio on my way to work & an ad came on about the winner of the R200 Million Lotto. Or whatever it was.

I was just wondering, granted the winner decided to take the cash as opposed to an annuity how will that R200 Million be paid out to him ?

I imagine it's not as easy as dumping the money into his account and calling it a day. Would the winner need to communicate with his bank for a special account with which his money can be handled ? It will obviously be taxed but what processes are there to handle this large payout thereafter ?
Lol special account.
 

Lebogang95

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It is not considered regular income and it is free from capital gains tax.

I'm assuming the reason for it being CGT free could be because it originated from nothing, ie. it is new capital. Any interest you gain from it though or large donations you make will be taxable.
Makes sense I suppose. I was reading an article & in the United States I think it was they get taxed. Not sure if it was the lottery or what.

Anyway thanks for the explanation
 

krycor

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Lotto is not taxed because they believed that adding income tax would discourage (apparently). This was done and debated when it came into being.

not sure if there is VAT on the ticket either.. essentially it’s considered a donation without limit likely to ease administration (>100k is usually taxed but not if you buy 100k tickets haha). Additionally the frequency you play lotto does not influence whether or not you a professional gambler.
 

eg2505

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Can confirm large winnings paid directly into bank account:

View attachment 628740
one question ive always had, that kind of follows, if you play lotto via FNB, they always say winnings of up to 50K are paid directly to you (after 2 days)
what happens if you win over that? you need to do anything special? like visit a consultant to pay you out?
 

Lebogang95

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Jan 26, 2019
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one question ive always had, that kind of follows, if you play lotto via FNB, they always say winnings of up to 50K are paid directly to you (after 2 days)
what happens if you win over that? you need to do anything special? like visit a consultant to pay you out?
Even Nedbank says the same thing. I assume it's the same across every bank ?
 

Drifter

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one question ive always had, that kind of follows, if you play lotto via FNB, they always say winnings of up to 50K are paid directly to you (after 2 days)
what happens if you win over that? you need to do anything special? like visit a consultant to pay you out?
No, if the winnings are over R50K, FNB will phone you to make arrangements.
 

Hemi300c

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Dec 15, 2009
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Why or how is it not taxed ?
If you win lottery it's tax free on your winning but as soon as it's paid into your account then the usual taxation is applicable.

If you are lucky enough to win a few times you are up for tax consideration as it is deemed a form of income.

I discussed this with lotto when I went to collect my R184K
 

pinball wizard

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Or whatever it was.

I was just wondering, granted the winner decided to take the cash as opposed to an annuity how will that R200 Million be paid out to him ?
In a couple of paper bags out the boot of a car in the local OK parking lot.
 
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