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Horses and Agricultural Property Relief (APR)
Business Property Relief (BPR)

Most people would consider that if you have an equine business your business is agricultural – but the Taxman does not always see it that way.

Stud Farming

This is one equine activity that can qualify for Agricultural Property Relief.

To quote the Inland Revenue Manual:

‘Stud Farming, which in these paragraphs is taken to mean the occupation of land for the purpose of breeding thoroughbred horses, is a very expensive and high risk activity. In some cases it may be carried on by wealthy individuals essentially as an adjunct to their racing activities. Nevertheless, for tax purposes it is treated as farming and thus – by virtue of ICTA88/S53(1) – as the carrying on of a trade regardless of its commercial viability’

Though this mentions only thoroughbred horses the rule should apply to sports horses provided there is genuine stud activity. But it will be necessary to keep separate anything done in connection with racing activities which will not qualify for relief.

Horse Livery

APR will not be available. Business Property Relief may be, but this will depend on the services provided. If all you do is a ‘DIY Livery’ this will probably be regarded as making or holding investments and no relief will be available.

So, if you provide services such as feeding, mucking out, putting out to graze, or arranging veterinary or farriery services you may be able to claim BPR. This is similar to a recent case relating to a grazing agreement for cattle which was not given BPR as grazing was not ‘akin to hotel accommodation for cattle’. So you would need to have a ‘horse hotel’ to claim the BPR.

Where you mix a livery service with a riding school or horse trekking, provided the stable rent is not the main activity you should be able to claim BPR.


This activity has to be classed with other sporting activities such as swimming pools, croquet lawns and tennis courts. There is a link with VAT – and if you have an exempt supply for VAT it is more difficult to claim BPR. A series of lettings is usually an exempt supply.

There has been a case involving VAT – Polo Farm Sports Club. Lettings took place daily for several hours each day and there was never a whole day between lettings. Though the Revenue argues there was still ‘a day’ between lettings the tribunal disagreed. The polo club won their case and achieved standard rated supply status for VAT. In view of this, it is quite likely that they will be able to claim BPR on their activities however each case will be taken on its merits and will depend on the activity surrounding the letting.

Integrated Farming and Equine Businesses

Following recent judgements in IRC v George(executors of Stedman) [2003] and Farmer (Farmer’s executors) v IRC [1999], it may be possible to claim BPR on let property and your success will depend on the amount of services provided.

Riding Schools, Horse Tourism, Trekking and Riding Holidays

If you offer a wide range of activities and training you should be able to claim BPR. Again the level of services will be paramount.

For those farmers who are looking to diversify into this area the British Horse Society has a range of places offering riding holidays and some ideas as to the minimum standards required by customers for horse accommodation can be found at Bridle Riders Ltd

Law correct at March 2015

If you would like any additional information, please contact Jean Newton on 01905 721600 or via email:

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