Editorial note: this guide explains UK tax in general terms only. It is not financial, tax or legal advice and is not specific to any prize offered by Fortune Games. Tax rules and allowances change and depend on your circumstances, so check GOV.UK or speak to a qualified adviser before acting.
What happens if you win a car in a competition?
If you win a car, you receive it tax-free — there is no income tax to pay on the prize. What changes is that you become responsible for insuring, taxing and running it from the moment ownership transfers to you. Many winners weigh those costs and choose a cash alternative instead, where one is offered.
Receiving the car
The operator arranges the transfer and the registration document into your name. As a UK prize, the car itself is not subject to income tax or capital gains tax when you receive it. You will usually need to provide ID for verification, and you should arrange insurance before you drive it away, because cover is your responsibility from day one.
The running costs
Owning the car brings the usual ongoing costs: insurance, vehicle tax (VED), fuel or charging, servicing, MOT once it is old enough, and any parking or storage. On a high-value or high-performance car these can be significant, which is worth thinking about before you picture yourself behind the wheel. If the car is brand new, factor in depreciation too.
Selling it or taking the cash
You are free to sell a car you have won, and there is good news on tax: private cars are exempt from capital gains tax, so selling one does not create a CGT bill even if you get a strong price. If running or selling the car feels like hassle, check whether the competition offers a cash alternative — often a percentage of the headline value — which is also tax-free.
Frequently asked questions
Do I pay income tax on a car I win?
No. A car won in a UK competition is a tax-free prize. You do not pay income tax on it, though you take on the running costs once it is yours.
Will I owe capital gains tax if I sell it?
No. Private motor cars are exempt from capital gains tax in the UK, so selling a car you have won does not create a CGT charge.
Can I take cash instead of the car?
Often, yes. Many competitions offer a cash alternative, usually set at a percentage of the car’s value and stated in the terms. The cash is also tax-free.
When does insurance become my responsibility?
From the moment the car is transferred to you. Arrange cover before driving it, as you are legally responsible for insuring and taxing it as the new owner.
Related guides: What is a cash alternative? · Can you sell a competition prize? · Tax on competition winnings
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