Britain's record lottery smaller than Powerball, but has big advantages

UK lotto national lottery
Britain's National Lottery may not be as big but the odds are lower and there are no taxes on winnings.

Britain is also having a record setting lottery drawing Wednesday night, and while it is puny compared to the Powerball drawing in the U.S., it has distinct advantages -- the odds and taxes.

The National Lottery's record "Lotto" jackpot is £50.4 million ($74 million) in Britain, only a fraction of the $900 million Powerball lottery.

Drawings for both will take place Wednesday night.

Here's a comparison of the odds of winning and taxes on the winners.

Odds:

To correctly guess all six balls on any given week in Britain, the odds are 1 in 45 million. Under Lotto rules, when the jackpot reaches £50 million, someone with five correct numbers can win, lowering the odds considerably. The jackpot has reached this level after 13 rollovers with no winners.

In the U.S., the winning Powerball odds are, well, even more remote: about 1 in 292 million.

Tax:

In the U.S., Federal income tax will take more than a third of the lottery winnings. Many states tax lottery winnings as well. Also, If you choose to take it all the winnings at once, Powerball rules states you only get a portion of the winnings and you are taxed on that. If you take a portion of the winnings over many years, you get the full value eventually and may pay tax at a lower rate.

British lottery winnings are tax free. Tax is paid when you buy a ticket.

Related: Michigan woman wins $300 million Powerball

One catch though: You have to physically be in the U.K. in order to buy a ticket, whether online or in a store.

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