Currently, these are nearly 60 million euros which are put into play by EuroMillions. The promise of a new life for the lucky winners, and 20 billion euros in winnings pocketed each year by the Française des Jeux. And if you were one of the lucky winners, the question would be: should it be yes or no? declare your earnings to the tax authorities if you win the jackpot?
No tax on the jackpot…
If you ever have the chance to pocket the jackpot at EuroMillions, or any other lottery game, good news: they are not taxable. French law is clear on this point, and also applies to scratch games as well as to winnings obtained from games of chance. The tax does exist, but it was levied upstream, as part of the tax on money bets.
No income taxes in the context of a winning draw so you can breathe easy. On the other hand, what you are going to do with all this money remains taxable. It is therefore necessary to follow a few rules to avoid falling foul of the law. In France, the FDJ has set up a specialized unit to support players who have won at least €500,000 in winnings. And unsurprisingly, it’s not possible to do anything.
L’exception casino
In France, winnings from games of chance are not subject to income tax. On the other hand, for casino games, a specific social security levy of 12% applies to the fraction of winnings exceeding 1,500 euros. This deduction is made directly by the gaming establishment when paying winnings and does not require any additional tax declaration.
But a bunch of taxes
The year following your earnings, you will have to declare to the tax authorities all of your investments and investments made thanks to your new wealth. Gifts you have made to your loved ones are also subject to tax, as long as they do not exceed a certain amount. The latter varies depending on the relationship between you and the beneficiary.
In France, it is therefore entirely possible to transmit large sums to loved ones without paying a single euro in tax. Contrary to popular belief, these donations are neither exceptional nor reserved for very high net worth individuals. They are based on a system of tax reductions, renewable every fifteen years, which makes it possible to anticipate an inheritance or to help a loved one at a key moment in their life.
The best known case concerns children. Each parent can give up to 100,000 euros to each of their children without gift tax. For a couple, this therefore represents 200,000 euros per child, completely exempt. A lever often used to finance a real estate purchase, studies or a professional project.
Grandchildren also benefit from a favorable regime, even if the amounts are more modest. Each grandparent can transmit 31,865 euros to each grandchild, always without taxation. Here again, the two grandparents can combine their allowances, which makes it possible to reach more than 63,000 euros transmitted without tax.
Donations are not limited to the direct downward line. It is also possible to give to one’s parents, with the same reduction of 100,000 euros, or to one’s brothers and sisters, up to 15,932 euros. Nephews and nieces have a lower, but very real, allowance of 7,967 euros.
An essential point is often misunderstood: these amounts are not absolute ceilings. It is possible to donate more, but the excess portion will be subject to gift tax depending on the relationship. Another key element, the tax counter resets to zero every fifteen years, which makes it possible to organize a progressive and optimized transmission over time.
Furthermore, financial investments are not all in the same boat from a tax perspective. Regulated savings accounts such as the Livret A or the LDDS are completely exempt from tax, while other savings products or interest-bearing accounts are subject by default to the single flat-rate deduction, also called flat tax. The latter amounts to 30%, including 12.8% income tax and 17.2% social security contributions, deducted automatically.
On the real estate side, the real estate wealth tax only concerns net real estate assets greater than 1.3 million euros. Below this threshold, no IFI is due, even in the case of rental investment.
In the majority of cases, these deductions are made at source, which avoids any special procedure, even if the amounts remain visible on the annual income declaration.
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