Confused about winnings from poker

[HarrySH]

I have a quick question about poker - what are the winnings classed as financially? I have looked at sites but can't see anything about gambling winnings. I've been playing it more recently and starting to get the hang of making money out of it. I was wondering if anyone could help me out? Thanks in advance

Edited May 4, 2018 by Sir Puntalot
Link removed.

[muttley]

It's tax free, if that's what you mean.

[Bart(UK)]

Hi HarrySH,

My understanding is that it largely depends on what country you come from and/or reside in and their own taxation regulations.

Here in the U.K. for example we enjoy one of the more open & relaxed environments (always subject to regulatory changes at any time though!) where you don't generally need to declare poker winnings unless they are your main or sole source of income. Taxation is usually dealt with at source via the poker providers.

If you don't have a job and rely on poker (or gambling) winnings as your main or only source of income then you should be declaring those earnings and be taxed on them in accordance with the current rates of Income Tax after deducting any relevent Personal Taxation Allowances, in the same way as your employer would if you held a job or you would declare your earnings if self employed. That would apply irrespective of whether you deem yourself a professional poker player or not.

If, however, poker is not your main source of income, the current regulations are more relaxed and any winnings are generally treated as part and parcel of your hobby or pastime.

Where it can get tricky is how do you define your main source of income or how do you treat large monetary value one off wins?

Other countries regulations vary dramatically from not having to declare any winnings to a legal requirement to declare all winnings. Some nations have high taxation rates whilst others much lower rates apply.

Additionally, if you are resident in one country but spend several months a year in a different country, you may become liable to pay local taxation on winnings/earnings instead of or even in addition to your own country's taxation.

It can get quickly get very confusing. If you are beginning to earn good levels of winnings from poker/gambling or are increasingly relying on that income, it might pay to seek proper financial advice from a suitably qualified advisor. But don't lose any sleep if you just win a $1 single table tournament

Keep up the good results and have fun!

Best regards,

 

Bart

[Bart(UK)]

7 minutes ago, muttley said:

It's tax free, if that's what you mean.

Lol, as always muttley nails it on the 'flop', whereas I tie myself in knots trying to get to the 'river' 

[muttley]

I have a few friends who have had $100K+ wins at poker. As far as I am aware none of them have ever paid tax on their winnings.

I think that spread betting on shares and commodities can be taxable if it becomes your main source of income.