ATO urges lottery winners to declare interest earned on prize money
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The thrill of playing the lottery is a pastime many Australians enjoy, with the dream of hitting the jackpot and transforming one's life overnight.
And that dream becomes a reality for a lucky few, such as the fifteen syndicate members who recently shared the $70 million Oz Lotto jackpot.
Each member walked away with a life-changing $4.713 million, but with great fortune comes great responsibility, especially for the Australian Taxation Office (ATO).
The ATO has issued a crucial reminder to all lottery winners, one that every Aussie who dares to dream should heed.
While the initial windfall is not taxable, the ATO wants winners to remember that any interest earned on those winnings is considered assessable income and must be declared.
This is where the waters can get a bit murky for the uninitiated.
Placing your winnings in a high-interest account might seem like a savvy move, and it can be, but it also means that the interest generated could bump you into a higher tax bracket come tax time.
If not managed correctly, this could lead to a larger tax bill than expected.
Financial planner James Wrigley from First Financial advises that seeking professional guidance is key when you are suddenly wealthy.
'The thing that catches out a lot of lotto winners, elite sports people and all the rest, is that they go spending the capital,' he cautioned.
Instead of splurging on luxury items, Wrigley suggests investing the money wisely, such as in a trust, to ensure long-term financial security.
It's a sentiment echoed by the stories of the recent Queensland winners, who have diverse plans for their newfound wealth.
From purchasing a first home to considering retirement, the impact of their win is as varied as their backgrounds.
Yet, regardless of their choices, each winner must navigate the complexities of sudden wealth.
With approximately 30 per cent of Australian adults participating in lotteries at least once a month, the chances of winning may seem slim.
Still, the reality is that it could happen to anyone. And when it does, it's not just about the celebration; it's about thoughtful financial planning.
For those who are part of a lottery syndicate, it's also essential to check your tickets promptly.
As The Lott's Anna Hobdell points out, some winners might still be unaware of their good fortune.
'Just imagine how thrilling it would be to discover you’re part of this winning group...your plans for Easter and beyond could be transformed,' she said.
The recent Oz Lotto draw 1626 on Tuesday 15 April 2025 saw not only the syndicate winners but also 1,248,555 winners in divisions two to seven, collectively taking home over $27 million.
This includes 41 division two winners who each scored $24,374.50—a reminder that even smaller wins can add up to significant amounts.
If you won the lottery, how would you handle the sudden responsibility—save, invest, or splurge first? Have you ever pooled in for tickets with friends or family? Share your thoughts and experiences in the comments below.
And that dream becomes a reality for a lucky few, such as the fifteen syndicate members who recently shared the $70 million Oz Lotto jackpot.
Each member walked away with a life-changing $4.713 million, but with great fortune comes great responsibility, especially for the Australian Taxation Office (ATO).
The ATO has issued a crucial reminder to all lottery winners, one that every Aussie who dares to dream should heed.
While the initial windfall is not taxable, the ATO wants winners to remember that any interest earned on those winnings is considered assessable income and must be declared.
The ATO has reminded lottery winners that interest earned on winnings must be declared as income. Credit: Facebook
This is where the waters can get a bit murky for the uninitiated.
Placing your winnings in a high-interest account might seem like a savvy move, and it can be, but it also means that the interest generated could bump you into a higher tax bracket come tax time.
If not managed correctly, this could lead to a larger tax bill than expected.
Financial planner James Wrigley from First Financial advises that seeking professional guidance is key when you are suddenly wealthy.
'The thing that catches out a lot of lotto winners, elite sports people and all the rest, is that they go spending the capital,' he cautioned.
Instead of splurging on luxury items, Wrigley suggests investing the money wisely, such as in a trust, to ensure long-term financial security.
It's a sentiment echoed by the stories of the recent Queensland winners, who have diverse plans for their newfound wealth.
From purchasing a first home to considering retirement, the impact of their win is as varied as their backgrounds.
Yet, regardless of their choices, each winner must navigate the complexities of sudden wealth.
With approximately 30 per cent of Australian adults participating in lotteries at least once a month, the chances of winning may seem slim.
Still, the reality is that it could happen to anyone. And when it does, it's not just about the celebration; it's about thoughtful financial planning.
For those who are part of a lottery syndicate, it's also essential to check your tickets promptly.
As The Lott's Anna Hobdell points out, some winners might still be unaware of their good fortune.
'Just imagine how thrilling it would be to discover you’re part of this winning group...your plans for Easter and beyond could be transformed,' she said.
The recent Oz Lotto draw 1626 on Tuesday 15 April 2025 saw not only the syndicate winners but also 1,248,555 winners in divisions two to seven, collectively taking home over $27 million.
This includes 41 division two winners who each scored $24,374.50—a reminder that even smaller wins can add up to significant amounts.
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