Poker, taxes, US, UK & Canada

[phydaux]

I have a question for some of the non-Americans.

As I understand it, people in the UK do not have to pay taxes on their gambling winnings. Is this correct?

What about citizens of other members of the Commonwealth?

Joe Hatchem is an Aussie. Does that mean that, as a non-American citizen, I'm assuming Joe didn't have to pay US taxes on his win, but did he have to pay the aussie government?

What about Canada? Daniel Negreanu is from Toranto. Does he have to pat taxes on his WPT & WSOP winnings?

If he answer to these questions is no, then the next obvious question is how do I get citizenship in Bermuda?

[DoGGz]

Short and dirty: If you are a US citizen, and you live in another country, you will have to pay US taxes unless you reside in that country for ~11 months out of the year. So if you want to travel in the States to play poker, you are severly limited.

Nice try, though.

[phydaux]

Thanks DoGGz, but that wasn't the question that I asked.

I asked about citizens of Canada, Australia and the UK.

Anyone?

[THAY3R]

1. You would have to denounce your citizenship if you want to avoid paying US taxes. If you do that, good luck ever going back to America.

2. The way I've heard it, if it's your main source of income(i.e. job), you have to pay taxes.

[Roba1111]

[ QUOTE ]
As I understand it, people in the UK do not have to pay taxes on their gambling winnings. Is this correct?


[/ QUOTE ]

Yes, this is correct

[daveymck]

I think Hachem did have to pay tax on his WSOP win, if a UK resident citizen wins money in the States then it isnt taxable as there is a netting off agreement, from memory I dont think Austrailia has that, which I think is why Mel Judah says he is UK.

The commonwealth countries nowadays have their own laws and taxes so each country may have different gambling tax rules.

[centgas]

[ QUOTE ]
I think Hachem did have to pay tax on his WSOP win, if a UK resident citizen wins money in the States then it isnt taxable as there is a netting off agreement, from memory I dont think Austrailia has that, which I think is why Mel Judah says he is UK.

The commonwealth countries nowadays have their own laws and taxes so each country may have different gambling tax rules.

[/ QUOTE ]

I remember reading that Hatchem successfully argued in court that his winnings should be categorised differently to other income (ie. a prize that isnt his job) and so avoids tax.

[blueodum]

Daniel is a US resident - he (almost certainly) pays taxes there even though he's Canadian.

Short version: if you are a professional poker player the tax law in Canada requires you to pay income tax (if you are a Canadian resident).

[amulet]

there seems to be a lot of incorrect information posted. us citizens do have to pay taxes wherever in the world they make the money. if you give up your us citizenship you would still have to pay taxes for 10 years no matter where in the world you reside.

uk the law is changing. they are taxing businesses more then before, and considering taxing winnings. however, as currently proposed, said winnings earned offshore would only become taxable when they were brought into the uk.

[efficacy]

I think that U.S citizens living abroad can exlude the first $80k of their income, assuming it was not earned in a U.S. based business.

[centgas]

[ QUOTE ]
there seems to be a lot of incorrect information posted. us citizens do have to pay taxes wherever in the world they make the money. if you give up your us citizenship you would still have to pay taxes for 10 years no matter where in the world you reside.

uk the law is changing. they are taxing businesses more then before, and considering taxing winnings. however, as currently proposed, said winnings earned offshore would only become taxable when they were brought into the uk.

[/ QUOTE ]

And where did you hear they were considering taxing winnings? Of all the people involved in these discussions with some knowledge, you are the only one to make such a statement.

[BarbarianX]

In Sweden there is no tax on online poker (actually if the company is within EU, like Party Poker in Gibraltar, but they don't really have the means to check out where the money comes from). Live poker in US must be taxed (30%). In UK there is no tax whatsoever on gambling. But is it that easy to change citizenship? I mean you're not a fugitive from a muslim country... (lol)

[BarbarianX]

By the way, dont even consider moving to Sweden, the country sucks, I know, I've been living there for 38 years... (ironicaly, when I finally go to the country of my dreams, I cant play Party poker there)

[Todpullen]

[ QUOTE ]
[ QUOTE ]
there seems to be a lot of incorrect information posted. us citizens do have to pay taxes wherever in the world they make the money. if you give up your us citizenship you would still have to pay taxes for 10 years no matter where in the world you reside.

uk the law is changing. they are taxing businesses more then before, and considering taxing winnings. however, as currently proposed, said winnings earned offshore would only become taxable when they were brought into the uk.

[/ QUOTE ]

And where did you hear they were considering taxing winnings? Of all the people involved in these discussions with some knowledge, you are the only one to make such a statement.

[/ QUOTE ]

I found an interesting article here that seems to address this somewhat - the article was written in 2002 one year or so after they removed the 9% tax on gambling winnings: Bet Asia article on UK gambling laws and tax 2002 (http://www.betasia.com/article/89/how-to-win/business-life/uk-gambling-laws.html)

It (the article) suggests that the chancellor was considering re-taxing gambling if tax revenue from the bookies didn't rise. Four years on from that article we don't just not have the tax back, but in fact a further gambling bill to encourage super casinos and all sorts of things: Biz Ed new UK gambling laws proposed (http://www.bized.ac.uk/current/leisure/2004_5/251004.htm)

Hope I am not being impolite or spammy by jumping in, but I have been interested in how the gambling laws are going here in the UK.

[excession]

They have never taxed poker winnings in the UK- the article is about horse racing only.

The government used to collect tax on bets placed with licnesed bookies.
The UK bookies started going offshore so they could offer punters better odds and pay less tax on their own profits and that is what the article is going on about.

[sandycove]

In a very general sense, most civil authorities find it much more efficient to collect taxes at the point of purchase -- stamp taxes, duties, value-added taxes, and the like. This is often true of wagering as well, where governments share a piece of the vig on all bets and punters kid themselves that their bets are tax-free.

The United States is unusual in that so much of its federal revenue is produced by a cumbersome, complicated, self-reported income tax on individuals, including gambling income, whether it is legally earned or not. The fact that both the states and the federal government regulate "gambling" and collect income taxes independently adds to the complexity and the confusion -- as well as attempting to tax only winnings, individually and voluntarily.

In Ireland, the local tax man will be showing up unannounced, from time to time, to check on what you might have said you have, or said you don't have anymore, and he'll be out in the fields with yer man, Paddy, negotiating over how many taxable cows yer man might have in his field that day, as the critters in question chew away in plain sight.

I expect that Doyle Brunson's accountant does a bit of this kind of horse-trading with the tax man every few years as well...