One thing The Traitors winner cannot do with huge cash prize

The final of is fast approaching on the as the Faithfuls try to sleuth out who isn’t to be trusted for a last time this evening. The Claudia Winkleman hosted show is set for a dramatic last episode of the third season as someone will be crowned the winner.

Whoever comes out victorious – whether that be the – will bag themselves a whopping cash prize of up to £120,000. 

While the payment is tax-free, there is one thing that they should think twice before doing with the winnings – giving it away. 

This could be a problem for many of the contestants as a previous episode, where the remaining six players enjoyed a dinner together, showed them sharing their plans for the money. Many of them hoped to be able to treat their family members – but their plans could now be scuppered.

According to , gifts from winnings are subject to Inheritence Tax (also known as gift tax).

This means that if you win a tax-free cash prize from a competition then there are a number of things that you need to consider before giving your money away to anyone as they may be taxed on it otherwise. 

According to Gov UK website: “No tax is due on any gifts you give if you live for seven years after giving them – unless the gift is part of a trust. This is known as the seven year rule.

“If you die within seven years of giving a gift and there’s Inheritance Tax to pay on it, the amount of tax due after your death depends on when you gave it. Gifts given in the three years before your death are taxed at 40%.”

There are also limits on how much cash you can give away. You can only gift up to £3,000 every tax year without being taxed IHT.

The good news is, you can carry over one year’s allowance to the next tax year, but only up to a maximum of £6,000. 

You can also give up to £250 per tax year to anyone without them being subject to IHT. As long as they didn’t receive any gifts from your annual £3,000 allowance then this gift is tax-free.