More like 6 years in the nick  (Hi BTW )

And so you should. Dropped me right in it you did!

poor old Tom

I hope Aaron doesn't win .... The £990 is more than enough for that pillock .... pitty he didn't get the £10.

Oh right, clear as mud that. So it's legally binding in taxation law but can be effectively ignored (is that avoided or evaded?). 

 I can say with complete and utter certainty that I don't know 

that'll learn me to think out loud again 

we should really know this Suzy 

As I don't watch Big Brother, it was by pure chance that I read this thread and saw Olly's question about tax and the various replies about it.

The prize money is not subject to income tax, and neither is any redistribution of the prize money.

The prize money is not subject to capital gains tax, and neither is any redistribution of the prize money. As the prize money is in the form of cash, capital gains tax does not apply to cash assets.

Inheritance tax has already been covered in other posttngs, but the initial prize winners would not pay any inheritance tax on their initial prize. Inheritance tax could only arise if a prize winner decided to give some of the prize away. Gifts totalling £3000 in any one tax year would not be subject to inheritance tax. If the person making the gift had made less than £3000 of gifts in the previous tax year, then the unused part from the previous year can be used in this tax year. Therefore someone could give potentially upto £6000 without there being any inheritance tax. Small gifts up to £250 to any one person are ignored, but someone couldn't give £250 to a person one day and then another £250 the following day to the same person - that wouldn't work - the whole £500 would count towards the annual £3000.

Gifts of over £3000 would count as a gift for inheritance tax. However this is regarded as a PET (potentially exempt transfer), and as has already been pointed out, provided the person making the gift survives at least 7 years, there is no inheritance tax.

Generally inheritance tax is payable by the executors of the estate if the person who has died out of the assets of the estate. If inheritance tax is due and the estate is unable to pay the inheritance tax then it would be possible that the people who received the gifts would have to pay the inheritance tax.

If someone gives you a gift and they do not survive for seven years after making the gift, you would only be liable to pay Inheritance Tax on that gift if the value of the estate - including the gift - is over the Inheritance Tax threshold (£325,000 in 2011-12 tax year) and there is not enough money in the estate to pay the Inheritance Tax.

However, if all the gifts made by that person during the seven years before they died add up to more than the Inheritance Tax threshold (£325,000 in 2011-12 tax year) - just the gifts themselves not the rest of the estate - Inheritance Tax will be due on all of the gifts that brought the total above the threshold. In this case, you as the donee will usually have to pay the tax due on your gift.

I take no responsibility for any errors or omissions in the above, and anyone considering making any substantial gifts should not reply on the above and should seek professional advice themselves.

After that lot, I think I deserve the prize money myself

Just because you said it in one post while I spread it over three or so, will not entitle you to any more of the money than me. In fact I think I deserve a larger share because I thought I was only talking to Olly and THEN discovered I had to explain to others. You, however, knew you were talking to everyone from the start.

Whaaaaat??? On a public forum? Are you serious? And anyway, El Loro explained it better 

Fluffy, OK - I'll let you keep all the prize money you get

omg 

to think I nearly completely missed this thread!!!

I totally heart this thread!