It is also important to ensure that the union agreement is kept up to date. Although the syndicate does not need to register with Camelot, which operates the lottery, the syndicate manager must register as a player. Peter Chadborn, director of independent financial advisor Plan Money, explains: “If the winnings are distributed to other union members, they appear to be “gifts” and, as such, would be included in the winner`s estate if they die within seven years of the “donations.” Philip Scott of This is Money says: There are no arguments like the ones that break out between friends for the money. Therefore, the bottom line is that you need to make a formal agreement if you want to make sure that there are no disagreements at all levels. For example, if your union has been lucky and the money is distributed among the players, it can indeed pique the interest of the taxpayer. But through a formal agreement, you have proof that the union existed before it won. Fortunately, you can download a syndicate agreement here on the National Lottery website. To be very careful, you might also be able to get it approved by a lawyer. Each member must have a copy of the document. HMRC said no IHT will be due on the union`s profits, provided the payments are distributed in accordance with a pre-arranged agreement.

And here`s another reason why you need to draft the agreement. In the case of a big lottery win, what are the tax implications of sharing the prize money between the syndicate with or without a formal document? Your union needs to appoint a manager, and their main responsibilities are to collect the money, verify the results, and keep everyone informed. When buying numbers online, it is very important that each union member fills out the union agreement to avoid complications later. All prizes will be paid to the union official, who will then be responsible for distributing the winnings. We have a union of six people who play the National Lottery. Each week, a different member buys the tickets, with the price shared. What are the chances?: Lottery syndicates without a contract could face an unpleasant tax bill. It is important that there is a formal agreement to protect union members, including to avoid the possibility of an IHT in the event of death within seven years for the member who receives and distributes the profits. I would be grateful if you would give me your opinion on this. A.B. (by e-mail) At the moment, we do not have an official document. Is it necessary? It makes sense to do this as soon as possible.

It is not special that with a member with a winning ticket, winnings are kept, the main concern is tax liability. Lottery winnings are not subject to income tax. However, once deposited, the winnings would be part of the winner`s estate for inheritance tax (IHT) purposes. .