Winning the lottery — whether it’s thousands or millions — is a life-changing event. But without a smart financial plan, the money can disappear faster than expected. Here’s a guide on how to invest a lottery win wisely, plus the tax implications you need to know.

Tax Implications

Lottery Winnings in Ireland Are Not Taxed. You keep 100% of the prize — tax-free. This applies whether you win the Lotto, Euromillions, or other officially sanctioned games.

Income from the winnings is taxable however if you invest your winnings and earn:

• Interest (e.g., from a deposit account) which is taxed as Deposit Interest Retention Tax (DIRT) (33%).

• Dividends or capital gains from shares or funds which is taxed at 33% Capital Gains Tax (CGT).

• Gains made on Investment Savings Accounts & Investment Bonds which is taxed at 41% (Exit Tax).

• Rental income, which is taxed as income, up to circa 52% depending on your bracket.

Also:

If you gift large amounts, Capital Acquisitions Tax (CAT) may apply to the recipient (depending on the amount and relationship).

Initial Plan

Don’t Rush and take time to adjust. Don’t quit your job, announce your win widely, or make major purchases until you have made strategic plan. Make sure to Assemble a Trusted Team consisting of a Financial Planner – to design a long-term investment strategy, a Tax Advisor – to manage liabilities and structure gifts/inheritance and a Solicitor – for legal matters (wills, trusts, etc.)

How to Invest:

• Small Wins (€10,000–€100,000)

– Pay off short-term debts (credit cards, personal loans)

– Build an emergency fund (3–6 months of expenses)

Consider:

• Lump-sum deposit savings (easy access but low returns)

• Regular Premium Investment Savings Plans or Investment Bonds (via life companies)

• Max out your pension contributions for tax relief (Be aware of age-related limits and earnings cap)

• Medium Wins (€100,000–€500,000)

Invest based on your goals and timeline:

• Short term (1–3 years): High-interest savings or low-risk funds

• Medium term (5–7 years): Diversified investment fund (balanced or growth)

• Long term (10+ years): Higher equity exposure, possibly global funds like the S&P 500

Consider:

• Lump-sum Pension contributions

• Children’s education fund

• Property investment — carefully assessed

Big Wins (€500,000–€10M+)

Consider asset allocation strategy: Cash, Equities, Property, Pensions, Alternative Investments

Split between:

• Low-risk income (Bonds, Deposits)

• Long-term growth (Investment funds, Global equities)

• Strategic purchases (Real Estate, Business Opportunities)

Set up:

• Trusts or companies for wealth protection or gifting

• Succession & inheritance planning early (Section 72 Policy)

Key Tips for Lottery Winners

• Live off the income, not the capital

• Avoid pressure from family or friends for loans/gifts without a plan

• Diversify — don’t put all your winnings in one property or fund

• Keep it quiet — privacy is protection

Summary

Lottery winnings in Ireland are tax-free, but income from them is not. Smart investing depends on your goals, timeframe, and comfort with risk. Work with professionals to preserve, grow, and enjoy your wealth.

By Gavin O’Sullivan BBus., Msc., CFP®., QFA., RPA., SIA., FPRA., APA

May 2025

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