News Feed LottaRewards News

How lottery winners can stay rich

Date: 2016-07-08 14:14:28

Whether someone is a serious lottery player or an occasional lottery player, doesn’t matter. Once someone wins, their entire life changes in a flash and their judgements become unclear. There are many ways in which one can lose their lottery winnings, but there are also many ways in which a winner can look after them well. Lottery winners must keep their personal money separate from their lottery money. They must be treated as two completely separate entities. 


A winner’s personal money


By this, we are referring to money not related to a lottery win. This comes in the form of wages or salaries. It’s the money that you need to pay your rent, bills, and food. This is the kind of money that you cannot afford to waste away. It’s the money you need to survive. This is relevant, of course, should the winner choose to continue working. Of course, it will be a different story if they quit their job and decide to live off the winnings, which could also be dangerous should they not invest in an accountant and a proper budget. 


Where should a lottery winner live? 


Many lottery winners choose to remain in the same country because of their family and friends, but some lottery winners are alone, or they no longer have any more family left. The first thing they would probably have their hearts set on is to move to a new country and have a fresh start. A smart idea would be to move to a country that has less tax so that your winnings aren’t eaten up as fast. 


One option could be Switzerland. It’s a gorgeous place to live even if it might not be the most “happening”. Residents who are retired can choose to pay a lump sum based on the rental value of their home (rented or bought) which equates to their living expenses. Otherwise, the tax you are charged depends on where you live. Overall tax is limited to 20% if you choose a canton that suits your wealth profile. There are as many as 26 cantons.


Cyprus is another option. The weather is pleasant, and so are the people. Residents are taxed on money they make anywhere in the world, but the difference is that the income tax isn’t on dividends or interest. Instead, Cyprians contribute to a “defence tax” of 15%. There is no wealth tax, but they do have to pay real estate tax which is less than 1%. There is no capital gains tax unless you own a business in Cyprus. 


Dubai is an alternative. It’s a bit hot, but there is absolutely no income tax, CGT, or inheritance tax. The tax profit made in Dubai exists in the form of “municipality tax”. This comprises of certain commodities and services, as well as luxury goods. The tax on this doesn’t exceed more than 10% usually. 


How can winners protect their family?


If a lottery winner has a family, they are the number one priority, always. If they have young children, they must ensure that they pass on money to them in the form of a discretionary trust fund, and making the lottery winner the sole trustee. 


Winners can deposit from between £325,000 to £650,000 as a couple, into this trust every seven years. This will be subject to tax, but only about 6% every ten years. After which, the trust is then free from inheritance tax should the parents pass away. All children and future grandchildren will be included as beneficiaries in this trust. 


Should the parents choose to emigrate, then after three years they can choose to transfer the funds to an unlimited amount of foreign cash and assets Trust. To do this all they need to do is prove they are domiciled in another country, which means they live there permanently. 


Another consideration should be the money they choose to spend now. They can make full use of their allowances as well as money in later life. They should no doubt also invest in private pension schemes. A whole of life insurance policy is wise to invest in, too. “You buy insurance for however many millions in tax you want to cover, then put the policy in trust for your chosen beneficiary, so that the payout is outside your estate for tax purposes when you die,” says Cuthbert, an insurance specialist. 


Experiencing a lottery win is more of a reality than a fantasy because it could happen to anyone when they least expect it. It’s difficult, but not impossible. When that moment happens, it’s important that your lottery winners are fully equipped with the knowledge to thrive and take on the world with their newfound fortune. 


Till next time!


The LottaRewards Team 







Facebook comments


Our Brands

PHL-Logo-04-01
Lotto247-Logo-03-02
IGBsidebarbanner336x600

iGB
2017 WINNER

Best Lottery Affiliate Manager