High school classmates who share a tenth, an aunt who purchases another for her family and a cousin who acquires a third. She sends it via WhatsApp to all of her relatives so they have a picture of the number and can dream of thousands of euro. If that dream turns into reality, be careful. This photo does not prove that you have won the prize. It can easily be altered, as consumer organizations like the OCU remind us.
It is important to identify each participant in order to avoid any problems during the Christmas raffle. If there are thousands of euro at stake, a photocopy will suffice to avoid any friction.
It is important that all participants in the tenth attend the branch when collecting. The amount must be at least 2,000 euros. This is the best way to ensure that the Tax Agency knows all taxes have been paid. Let’s say five friends win the Grand Prize with 400,000 Euros. The first 40,000 euro of the Christmas Lottery is exempt. A 20% rate applies to 360,000 euros. The colleagues receive 288,000 euros each, which is free of tax. To that must be added the 40,000 euros exempted from taxes. The total amount of 328,000 euros must be divided by five, or 65,600 euro per head.
This way, the Treasury will already apply the withholding and the bank the income. This money must be reported on the income statement. What happens if one person charges it? Each of the five friends will need to report the income to the Treasury. The Treasury can interpret it in one of three ways: the prize, the donation (and taxes must paid), or it as a capital gain. They would not charge more than 65,600 euros.
Two details are needed for couples sharing a tenth. It is 50% if you are part of community property. If assets are separated, the person who purchased them will keep the money unless it is proven that they were a joint decision.
