Invest in premium bonds and get your winnings tax free!
If you invest in premium bonds all the prizes you receive are tax-free.
There is a limit of £50,000 you can invest but if you invest the full amount you are likely (but not guaranteed) to get a reasonable rate of return because of the amount of bonds you hold. Prizes are based on a rate of return of 1.40% until November 2020, and 1.00% from December 2020 onwards.
Regular prizes should come your way and they are completely tax-free.
More importantly perhaps, there is also the opportunity of winning the big prize of £1 million – there are two £1 million prizes each month.
Winnings on the national lottery are also tax-free but your chances of winning are far lower. If you win the lottery as part of a syndicate, make sure that you have a written agreement setting up how the group will be managed i.e. who buys the tickets and how prize winnings are to be shared out. If not the person who collects the prize and shares it out may be considered to be making gifts for Inheritance Tax purposes.
National Savings also offer a number of tax-free investments.
For further advice on tax free investments please contact us.
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