Is part loan money taxable income?

[abbijay]

Just a thought...
If you receive money from a part loaner/sharer should it be declared to the taxman as taxable income? I've seem people paying upwards of £200 pm and just wondered if technically it should go on your tax return.

(NB I don't currently receive any money towards my horse from a rider)

 

[Batgirl]

Don't qoute me but I think you would have to declare it but it would get written off against expenses?

 

[Cocorules]

Yes it is taxable income.

 

[happyclappy]

Yes,it is I am afraid

 

[Sussexbythesea]

I can’t imagine anyone declares it though do they? ( I am neither a loaner nor a loanee)

 

[Wishful]

Likely to be a "hobby" so you can't offset the inevitable loss against your actual income!

 

[JennBags]

If be very surprised if it was considered taxable income. It's not earnings, or rental income, and it certainly is not investment income!

 

[Shay]

It is earnings -legally a horse is an asset and so renting it out constitutes earnings. Air B&B (and similar) income is also declarable. Does anyone actually do it... does the riding instructor / farrier / feed merchant etc you pay in cash do so? Who knows.

 

[DaisyMoo]

I'm an accountant and can advise you do not. It us not classed as taxable income and the taxman is not interested in the least. Taxable income includes employment, dividend, self employment profits, savings and investments, property income etc. I hope this helps OP and anyone else that is concerned or confused in the legal standing and tax implications

 

[DaisyMoo]

It is earnings -legally a horse is an asset and so renting it out constitutes earnings. Air B&B (and similar) income is also declarable. Does anyone actually do it... does the riding instructor / farrier / feed merchant etc you pay in cash do so? Who knows.

Horses are not assets they are wasting chatels and loaningbthen most certainly does not generate a taxable income. See post above

 

[FfionWinnie]

Horses are not assets they are wasting chatels and loaningbthen most certainly does not generate a taxable income. See post above

Wasting chatels . I’m going to start referring to mine as that!!

 

[Vodkagirly]

Wasting chatels . I’m going to start referring to mine as that!!

MOST accurate description I've seen

 

[Orangehorse]

I think anything with a lifetime of less than 35 years is regarded as a wasting chattel - is that right?

 

[Cocorules]

Wasting assets relates to capital gains tax rather than income tax. It is any asset with a predictable life of less than 50 years. It can apply to plant and machinery and things like cars.

There is also a chattels exemption where the disposal proceeds are less than £6k.

Capital gains tax applies to gains on a disposal of an asset. Income tax applies to income and deemed income.

However if you exploit something like a car or a horse by loaning or sharing it, you would be subject to income tax on a profit of trade unless you are genuinely sharing the costs and making no profit. You would not manage to claim a loss and offset that against income unless you were genuinely going beyond a hobby and trying to make a profit and could genuinely achieve that.

Someone charging above actual cost for sharing would be subject to income tax on that. Most people won't be doing that when they share the costs of keeping a horse. However there are people who charge more. Someone I know charges 5 different people £35 a day for sharing their pony. Those sharers between them have the pony 6 days a week. The pony is field kept. I would be surprised if the costs were anything like £35 a day.

 

[sport horse]

Is the horse actually 'rented' to the loaner or is the loaner sharing the cost of the horse's keep? ie are you making a profit from loaning the horse? If so maybe the profit is taxable? If you are making a profit please tell us all how as so far I have never made a profit from horses!

 

[catkin]

This is from a complete layperson so have no idea of the tax implications .....

Does it depend upon the details of the share?
For example my brother and I shared a pony - both purchase price and maintainance bills were split in a % proportion - so I presume we were joint owners not sharers?
If now he wanted to 'share' my current pony (who is my property not shared ownership) and paid maintenance costs again to a % split are there any different tax implications?
And I presume any sale value would be to the owner unless there was a contract about any profit share in regard to work put in to put value on the horse?

In other words - a tight contract is needed to protect all parties?

PS I'm talking here of good family ponies not racing superstars, not worthless but not in the big-league - so maybe under tax thresholds anyways

 

[sport horse]

Many years ago a friend of mine asked the inland revenue if he should declare the income he received from selling bags of manure at his gate. Sure enough the IR came back 'yes', so he did his tax return including the income from the manure, but offset the cost of making the manure ie buying the horse, feeding and bedding it, paying someone to care for it etc etc. Guess what? The Inland Revenue suddenly decided they were not interested and he was not required to declare the manure income!!
I am sure a similar conversation would ensue for a donation from a sharer.