Horses as Assets
borro have lent against many unusual assets over the past few years, but in terms of unique assets, racehorses are in a class of their own. No other investment requires feeding, can run away when you’re not looking or is so liable to perishing without notice.
If you are interested in horses as an investment here are some facts to steer you in the right direction.
1. A one-year-old filly was sold for £5.25million in 2013
The daughter of legendary stallion Galileo, the horse was purchased by the Qatari Royal Family for a record price for a filly of that age. Prices for a quality flat-racing horse can start from £100,000, but regularly command seven figure sums.
2. Ascot is the number one racecourse in terms of prize-money in 2013 with £11.8million
The figure refers solely to flat racing, with York and Epsom Down ins 2nd and 3rd place respectively. The owner of a winning horse collects around 60% of the prize fund for that race with smaller cuts for the trainer, the jockey and other staff.
3. Horses are exempt from Capital Gains Tax.
As they have an anticipated life of under 50 years, horses, like cars, are not liable for CGT when being sold, whether owned outright or as part of a syndicate.
4. It costs around £20,000 a year to train a flat-racing horse.
This is before any veterinary fees, insurance and other costs to actually race the horse such as race entry fees and the cost of hiring a jockey.
5. Top Race Horses Can Earn Their Owner £20million in Stud Fees a Year.
Superstar British Thoroughbred Frankel commands £125,000 a time for his services in producing future generations of champions. Given he is able to do this over a 100 times a year, his return is pretty staggering. His father, the previously mentioned Galileo, produced 214 foals in 2011 at an estimated gross of £25million.
Unless you’re fortunate enough to invest in a horse similar to the ones mentioned above, the likelihood of making a big return on a horse is slim, most that do invest do it for their love of the animal and a passion for the business.