Taxation on Selling Horses

K

Kauto

At the Start
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May 26, 2009
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Has anyone any ideas on whether when selling a racehorse as an owner what the tax implications are?
 
If the tax man can demonstrate that you have sold the horse at a profit, then after legitimate expenses have been deducted, tax at whatever rate you pay would be due, I guess...

Although if you have managed to do that, good on you and remind yourself that you only pay tax if you've actually made money!!
 
At the moment from what i am reading and understanding there is no income tax or capital gains to be paid. Although Im guessing this may only be my own interpretation possibly.
 
I can't claim any tax rebates for my one ickle horse, so I don't see why the taxman should claim anything for himself if I sold her at a profit. She's a hobby, not a business - I imagine if your racehorse is registered as a business and you claim VAT back, etc., it's another matter, but as a fun/entertainment activity, I can't see how the appreciation of an animal would necessarily bring about a hit on any profit. It'd be like buying a Boy's Own Annual and selling it on at a profit - it's a fun activity, unless your business is buying and selling collectables.
 
In Ireland the distinction is quite clear. If it's your business to buy and sell horses then this is your trade and you are liable to income tax. If you are not in the business of buying and selling and sell one then not liable to any tax. It's because if they taxed owners for profits, they would have to allow expenses to be deductible. A fair and equitable tax system allows gains to be taxed and losses to be deducted e.g. capital gains tax allows you to carry forward losses and also gives you an annual allowance. So some chance when you make a few bob to get some deductions.
 
Well I claim my Vat back through a sponsorship deal but having read through the tax guide by the BHA I think there isn't tax on selling a horse unless like was said earlier it is for trade.
 
If you claim vat back on expenses of horse in training, ie if it is sponsored, then when you sell it you have to fill in a customs and excise form and pay the vat on profit, and they will check back to see what you claimed you paid for it orginally.
 
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