Winning a prize on Holiday – Where are the taxes paid?
You’re in Spain, soaking up the sun, glass of wine in hand. Life’s good. Then, ping, your phone lights up: you just won a prize in a raffle you casually entered through the reelraffle platform while waiting at the airport. Incredible timing.
But once the initial excitement fades, a less glamorous question pops up: who’s going to tax this, and where?
It’s not exactly the first thing you think about when you’re entering a prize draw abroad. However, this question is becoming increasingly relevant as more Brits play online raffles, lotteries, or even place bets while on holiday.
UK resident, Spanish win
Let’s say you live in the UK, but you hit the jackpot while on Spanish soil. In the UK, you’re usually in the clear; HMRC doesn’t come knocking for raffle or gambling wins unless you’re doing it professionally or turning prizes into income.
But in Spain? A whole different story.
In Spain, including the Canary Islands, any raffle prize over €40 gets hit with a 20% tax automatically. This means the organiser takes the cut before you even see the money. So, if the raffle reward is, say, €10,000, you might actually walk away with €8,000. Unless the platform makes it crystal clear that they’re covering taxes, assume they’re not.
And this doesn’t just apply to cash. If you win a physical prize, such as a designer bag, e-bike, or the latest console, you could still be liable for customs or VAT if it’s delivered while you’re in Spain.
What if you’re abroad and win a UK raffle?
Imagine yourself in France or Italy, participating in an online UK raffle and hoping for good fortune. It seems straightforward, doesn't it? But the country you’re physically in when the prize lands can change how that win gets treated.
Some places see digital prizes, yes, even non-cash ones like a luxe speaker set or a travel voucher, as taxable income. So instead of a clean win, you might end up owing fees or filling out paperwork you didn’t see coming.
What if the prize is a cryptocurrency or an NFT? Now you’re in even murkier territory. In a lot of countries, that’s not a prize, it’s an asset, and assets usually come with rules. And yes, some of them will tax you accordingly.
Playing from home, but the raffle’s not
Returning to UK soil, you could be joining a raffle run in the US, Dubai, or Spain, and while you’re comfy on your couch, things might still get tricky.
Some websites will seek ID, proof of residence, or maybe tax forms before the items are made available. American websites, for instance, frequently withhold 30% of your reward unless you provide them with a W-8BEN form. You can apply to get that back, but it’s a paperwork-heavy slog, and only really worth the trouble for bigger wins.
Casinos, poker tables, and lotteries
Raffles are just one piece of the puzzle. If you’re joining a poker tournament in Portugal, buying a lottery ticket in Spain (El Gordo), or placing bets online from your hotel in Greece, don’t assume you’re off the hook.
Some countries take tax off the top before you even see your winnings. Others might leave it up to you to declare later. The UK tends to be pretty hands-off with personal gambling wins, but that friendly policy doesn’t follow you when you’re abroad.
So… where are the taxes paid?
The answer depends on a few moving parts:
- Where you live (your tax residency)
- Where you are when you enter or win
- Where the raffle or gambling platform is based
- What kind of prize do you win (cash, product, crypto)
Sometimes the host country taxes it. Sometimes it’s the country you're in. And occasionally, you might have to deal with both sides.
Final thought
Winning something while you’re travelling feels like a sign from the universe. But if it’s a big win, and it’s coming from abroad, take a beat before you click “enter.” Read the fine print. Check if the taxes are covered. Know if customs or paperwork might follow.
Because while winning is great, finding out your prize came with strings? Not the kind of surprise you want in your carry-on.
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