Revealed: The advice given to Ireland's newest millionaires when they pick up their cheque at Lotto HQ
- An exclusive look at the advice given to Ireland's Lotto winners shows:
- Winners advised to check their benefit entitlement
- Advice stating financial planners can help winners minimise gift tax 'clarified in new material'
- Lotto regulator requested information from operator after court case
Check your ongoing benefits entitlement, engage a financial planner who can help you minimise tax payments on cash gifts and don't forget about your friends and family are all included in advice given by the National Lotto to winners.
For the first time Independent.ie can reveal the full package of formal advice given to prize winners when they stop by Lotto HQ to pick up their winnings - including a video presented by TV personality Craig Doyle.
Lotto chiefs were forced to clarify the procedures around advice given to Ireland's newest millionaires after the High Court heard evidence that a former official advised a winner to add her family's names to her winning ticket so her relatives could avoid paying gift tax.
Eamon Hughes, a former claims official, said it was "possible" he offered such advice to winner Mary Walsh when she picked up a cool €3.1m in 2011, as syndicates were 'regularly' formed after a win and not in advance.
Ms Walsh's stepson David Walsh successfully sued her for a €500k share of the jackpot.
Although Lotto operators, PLI, do not offer financial advice or provide a list of financial planners to winners there is a substantial packet of information given to winners to help them acclimatise to their newfound fortune.
The information was updated in February 2017, ten years after it was first published. The majority of the information contained in the booklets is the same, with changes made around the tax advice for winners.
First thing's first:
Lotto winners are advised to first "Do nothing. Yes, that's right nothing, nada zilch".
New millionaires are advised to exercise "cool, calm thinking" and to consider a break away for a few days to mull things over.
Winners are advised to lodge their cash in an instant access savings account while they seek out professional advice and let their big win sink in.
"You may even consider spending a small amount of the money to treat yourself or to through a party for family and friends".
Jackpot winners are urged to remember that "money isn't everything" and to involve friends and family in their long-term plans.
Most players have a vague idea of how they would spend a large windfall but the experts in Lotto HQ urge that winners take time to plan, making a costed list of priorities.
Lotto winnings are tax free but income earned on winnings is taxable and if a winner wants to gift some cash to their relatives the recipient will have to pay gift tax on the money.
The Lotto has repeatedly clarified that it does not advise winners on tax or legal affairs, instead it recommends that winners chose independent financial advisers.
In the original booklet, there was a section on "inheritance and gift taxes" which reads:
"Inheritance and Gift Taxes: When you give a gift to someone or they inherit from you they, may have to pay Capital Acquisitions Tax. But, depending on what relation they are to you, they are also entitled to get the benefit tax-free up to certain limits. Clever planning by your financial advisors can help minimise tax while maximising the return to those who you wish to benefit. This means your money is put to best use."
In the new material however, this has been updated to remove the reference to "clever planning" and instead reads:
"We recommend you seek independent expert advice to ensure your taxation matters are dealt with professionally."
When asked if the original advice was in line with legal and ethical guidelines the Lotto said it was.
"This advice meets our legal requirements in relation to tax laws in Ireland. Under our licence we have to provide winners with “counselling services”.
"We do not give financial or taxation advice, but rather, again in line with our obligations under the licence, we advise winners to seek appropriate professional advice. Our updated booklet clarifies the position, but the message in essence is still the same; we advise winners to seek independent expert advice to ensure your taxation matters are dealt with professionally."
The booklet includes five steps to choosing the correct adviser.
People are urged to meet with several, check their qualifications, talk with their existing clients and make sure that they feel comfortable with their new financial adviser.
Dos and Don'ts
There is also a prescribed list of money dos and don'ts which includes:
- Do get the best rate on your savings
- Don't leave yourself short
- Do pay off your debts first
- Don't put all of your eggs in one basket
- Use advisors
- Don't forget tax
- Sort out your life assurance
- Make that change
This section also includes advice for people who were receiving state benefits prior to their win which reads:
"Check your ongoing entitlement to benefits. Just keep in mind that if you receive any state benefits or special needs allowances, your winnings may affect your ongoing entitlements. If you have any concerns about this you should speak to your professional advisor or to the benefits agency concerned".
The older material also advised people to insure their family in this section.
Under the spotlight
A section on the media suggests that many people enjoy their few days of fame as much as the win and offers advice on taking part in media interviews.
The booklet also cautions that winners may begin receiving requests for donations, some of which will come from "less deserving sources".
People are urged to vet any charities or causes they may wish to donate to and are told:
"Remember, making a difference to people's lives, communities and the world can be incredibly rewarding but no one said you had to change the world just because you are a winner".
The booklet also includes short blurbs about the causes that the Lotto donates money to.
The booklet is populated with short "dream" descriptions and testimonies from previous winners about how their lives changed after the win.
A country house with a home cinema, watching the sun rise over the Taj Mahal, a road trip on on Route 66, a vintage Mustang car, becoming a writer, becoming an art collector and a space explorer are all "dreams" included in the booklet for winners.
The information (as it was before any changes were made) was given to the Lotto Regulator on February 10.
The Lotto regulator was set up when operations were privatised and has the role of continually monitoring a wide-range of materials from the Lotto, including winners booklets.
"The material given to winners was reviewed again in the context of information reported on the Walsh case," a spokeswoman for the regulator said.
"The Regulator did not require that any changes needed to be made to the material."