It’s 10% if you are a basic rate taxpayer when it comes to your income (see above), or 20% if you are a higher rate or additional rate taxpayer. The rate you’ll pay is either 10% or 20%. When you begin selling those investments and making profit, you might have to pay tax. Typical investments are stocks and shares, which is where you own part of a company (a share of the company). You might have to pay tax on your profit.
This is where you buy something of value (called an asset), and that asset goes up in value and you then sell it. If you were to invest your winnings, rather than put them in a savings account, you might have to pay Capital Gains Tax too. If you didn’t quite win the jackpot but still a fair bit, you might have to pay a bit less in Income Tax on your future savings interest – 20% if your total income is less than £50,270 per year. So, if you’re the lucky one and won millions of pounds on the lottery and put it in a bank account earning interest, you’ll probably have to pay 45% tax on most of your interest each year. Your income is based on a tax year, which runs from April 6th to April 5th the following year.
