You have recently taken a position as tax advisor with a small suburban accounting practice, the following clients visit the practice and you are asked by the practice manager to write a short report on each clients situation:

Client 1

Bill has just won a $1million Tatslotto prize. Bill has been buying a ticket weekly for many years and has never won before.

Required:

Write a report to the practice manager detailing how the Australian Tax Office would treat this winning. Refer to applicable taxation cases and rulings in your answer.