In this case a doctor bought a racehorse called Hermes for some £8,000 and proceeded to race the horse until it was sold to a polo farm due to poor results. This was when the problems arose with HMRC.

‘HMRC does not consider horse racing to be a taxable activity (see BIM55701) and even though the the First Tier Tribunal (FTT) accepted that the appellant in this case was attempting to engage in a different activity, ie, that of buying, bringing on and selling at a profit a half share in a single race horse,’ said Meg Wilson, CCH tax specialist. ‘The FTT still concluded that it did not amount to a trade, but was instead horse race gambling.’

The tribunal heard the case involving Dr Ewan McMorris, from Winchester, who agreed to buy a half share of a horse  called Hermes for around to £5,000 to £8,000 (he could not remember the exact amount) and meet half the training, livery and racing costs. [Ewan Leslie James McMorris and the Commissioner for Her Majesty’s Revenue & Customs, TC 04204 [2014] UKFTT 1116 (TC) Appeal number: TC/2013/07828]

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