Are Competition Prizes Taxable in Ireland?

Capital Acquisitions Tax (CAT)

CAT is the tax on gifts and inheritances. Because a prize is something you receive without paying for it, you might expect CAT to apply, but winnings have their own exemption.

Section 82 of the Capital Acquisitions Tax Consolidation Act 2003 exempts winnings from betting, or from any lottery, sweepstake or game with prizes, as long as the winnings are received bona fide: in other words, from a genuine competition where nobody can control who wins.

The Finance Act 2021 confirmed that this exemption covers non-cash prizes too, so a car, a holiday or a house won in a genuine draw is treated the same way as a cash prize.

Capital Gains Tax (CGT)

Winnings from betting, lotteries, sweepstakes and games with prizes are also exempt from Capital Gains Tax under section 613 of the Taxes Consolidation Act 1997.

When a prize can be taxable

The exemptions above cover prizes won as a member of the public. A prize is more likely to be taxed as income when it is really a reward for work. For example:

• Prizes from your employer, such as a sales incentive or staff award, are generally treated as part of your pay. Revenue has separate rules for these, including a small benefit exemption.
• Prizes earned through your trade or profession, such as an award for your artistic or business work, can count as income of that trade.
• Competitions that aren't genuine: if the winner is arranged in advance, the "bona fide" condition isn't met and the CAT exemption may not apply.

What happens after you win

The prize itself may be tax-free, but what you do with it afterwards is treated like any other money or asset you own:

• Interest earned on cash winnings in a bank account is subject to DIRT in the normal way.
• Running costs are yours. Insurance and motor tax on a car, or Local Property Tax on a house, aren't covered by the exemption.
• Giving the prize away to someone else may be a gift for CAT purposes for the person receiving it.

Frequently asked questions

Do I need to tell Revenue I won a competition?

For an ordinary competition prize that falls within the exemption, there is generally nothing to declare. If the prize is large, linked to your work, or you're unsure, check with Revenue or a tax adviser.

Is a house won in a raffle taxable?

Not under CAT, provided the draw is genuine. The non-cash exemption confirmed in the Finance Act 2021 was aimed at exactly this kind of prize. Find current house draws on our win a house page.

Is the Lotto taxable?

No. National Lottery winnings fall under the same exemptions as other lottery and game winnings.

Sources

• Revenue eBrief No. 018/22: exemption from CAT for bona fide winnings, extended to non-cash winnings by the Finance Act 2021
• Dáil written answer on the tax treatment of prizes, 15 February 2022
• Revenue: Gains, gifts and inheritance