Coast Competitions Guide · Explainer
Cash Alternatives and Selling a Prize: What Winners Can Do
Winning is the easy part. Then comes a decision most people have never had to think about. Do you take the prize or the cash, and if you take the prize and it turns out you would rather have the money, are you allowed to sell it? This guide covers both, and the tax position for each.
Last updated 3 October 2026 · Written by Coast Competitions
Key Takeaways
- What it is
- A sum of money offered in place of the prize, set by the operator and chosen by the winner after the draw.
- Why it is lower
- It reflects what the prize costs the operator, not the price on the box. It often still beats what you would get selling the prize second hand.
- Selling is allowed
- Once the prize is delivered it is yours to keep, sell or give away.
- Tax
- The prize is tax free and selling it soon after you win normally creates no tax to pay.
What a cash alternative is
A cash alternative is money offered in place of the prize. If the prize is a television and the competition page says there is a cash alternative of £300, the winner can have the television delivered or have £300 sent to their bank account. It is the winner's choice, made after the draw, and nobody can make them take the cash.
Not every competition has one, and operators handle it in different ways. On Coast Competitions, where a cash alternative is available the amount is shown on the competition page before you enter, so you know both options in advance. Our terms put it simply: if we offer one, the winner may choose it and is under no obligation to.
Why the cash is usually less than the prize
People sometimes feel short-changed when a £500 prize comes with a £400 cash alternative. There is a plain reason for the gap. The cash figure is based on what it costs the operator to put that prize in your hands, which is generally below the retail price, and the operator has already paid for payment processing, advertising and the running of the draw whichever way you choose.
A cash alternative close to the full retail price is generous. A very low one, half the value or less, tells you something about how the operator sees the arrangement. Either way, the time to look is before you enter, not after you have won.
Prize or cash: how to decide
Start with whether you want the thing. If you entered because you have been wanting a coffee machine for a year, take the coffee machine. You would never have got it for the price of a ticket any other way.
If you entered because the odds looked good, do the sum. Look up what the prize sells for second hand, new and sealed. Take off the selling fees and the postage. If that comes to less than the cash alternative, which it often does, the cash is the better deal and a great deal less bother. With a car, think about the running costs before the keys arrive. Insurance, tax and fuel on a performance car can come as a shock, and plenty of winners take the money for that reason alone.
Can you sell a prize you have won?
Yes. A prize is yours once it has been delivered to you, and you can do what you like with it. Keep it, sell it, give it to your sister. There is no rule that a winner has to hold on to a prize for any length of time.
The restriction comes earlier. Until a prize is handed over it belongs to the draw, and it is awarded to the named winner and nobody else. Under our terms a prize cannot be assigned or redirected to another person, and a cash prize is paid only into a bank account in the winner's own name. So you cannot ask for a prize to be sent straight to a buyer. Receive it first. After that it is your property.
A few practical things help if you plan to sell. Leave the item sealed, because sealed is worth more than opened, and that goes double for collectables like trading cards. Ask the operator for proof of purchase, since a buyer may want it for the warranty. And be straightforward in the listing about where it came from. “Competition prize, unopened” is a perfectly good thing to say and buyers see it often.
Tax if you sell
The prize is not income, so there is no income tax on winning it and none on turning it into money. We cover that in are competition winnings tax free.
Capital gains tax is the only one worth a thought, and it rarely bites. It is charged on a gain, meaning the difference between what something was worth when you acquired it and what you sold it for. For a prize, the starting figure is its market value on the day you received it. Sell a week later for about that amount and there is no gain to tax.
Two exemptions cover most prizes in any case. Cars are exempt from capital gains tax entirely, however much they sell for. And other personal possessions are exempt when they are sold for £6,000 or less. Tax would only come into it with something valuable that you kept for years and that rose in price, such as a watch or a rare collectable. Property is treated differently again. If you are unsure where your prize falls, our prize tax checker is a good first stop.
There is one more case worth mentioning. Someone who enters competitions systematically in order to sell what they win, as a business, is in different territory, because HMRC could treat that as trading. Selling the odd prize you happened to win is nowhere near that line.
If there is no cash alternative
Then the prize is the prize. Most terms, ours included, say a prize must be accepted as awarded and cannot be swapped for something else. You are free to ask an operator whether they would pay cash, and some will come to an arrangement, but they are under no obligation. If you know you would always rather have the money, enter cash draws, or competitions that state a cash alternative on the page.
Summary
A cash alternative is the operator's offer of money in place of the prize, usually somewhat below retail value and always the winner's choice. If you take the prize, it is yours once it arrives, and you can sell it or give it away. Selling soon after you win normally creates no tax to pay, and cars are exempt from capital gains tax however long you keep them. The competitions on our live draws page show any cash alternative before you enter, and how prize draws work explains what happens between winning and delivery.
Frequently Asked Questions
- A cash alternative is a sum of money the operator offers a winner in place of the physical prize. It is set by the operator, it should be stated before you enter, and the winner chooses between the prize and the cash after the draw. Not every competition has one.
- Usually, yes. The figure tends to sit below the retail price because it reflects what the prize costs the operator to supply, and because a winner taking cash saves the operator delivery but not the cost of running the draw. It is often still more than you would clear by selling the prize yourself.
- Yes. Once a prize has been delivered to you it is your property, and you can keep it, sell it or give it away. What you cannot do is ask the operator to deliver it or pay it to somebody else, because prizes are awarded to the named winner.
- Almost never. The prize itself is not income. Capital gains tax only applies to a gain made after you received it, measured from its market value on that day, so selling soon afterwards normally produces no gain at all. Cars are exempt from capital gains tax altogether, and other possessions sold for £6,000 or less are exempt too.
- You can ask, but the operator does not have to agree. Where no cash alternative is advertised the prize is the prize, and most terms say it must be accepted as awarded. If having the cash matters to you, choose competitions that state a cash alternative up front.
- After it has been delivered to you, yes. A gift is not taxed in the hands of the person receiving it. With something very valuable, the usual inheritance tax rule on gifts made in the seven years before death could apply, as it would to any other gift.
Disclaimer
The tax points here are general information for 2026, not personal tax advice. The rules on capital gains are set out by HMRC in its guidance on personal possessions. For a high-value prize, speak to an accountant before you sell.