Allan and Piggott launch scheme for pooled racehorse ownership: Hope returns to bloodstock industry following Budget concession on VAT

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The Independent Online
DAVID ALLAN, the leisure entrepreneur, who has teamed up with Lester Piggott to encourage pooled ownership of racehorses, plans to bolster his scheme by harnessing a recent Budget concession on VAT.

Mr Allan is launching Racing for Pleasure, designed to encourage individuals or companies to own horses on a partnership basis, against a background of renewed optimism in the bloodstock industry following the Chancellor's tax changes.

Lester Piggott and his wife, Susan, have been brought in as advisers, and she will also train horses bought by the partnerships.

Susan took over responsibility for training when Mr Piggott was imprisoned in 1987 for tax evasion.

The aim is to have 30 people per partnership, with each member paying an annual fee of pounds 3,600. Mr Allan will receive an 8 per cent cut for management fees, while pounds 40,000 of the pounds 108,000 partnership pot will be used for running costs, covering winter training and stabling. The remaining pounds 59,000 will be used to buy two two-year-olds and two older horses, and to cover extra leisure activities like overnight stays at Mr Allan's Hintlesham Hall country house hotel in Suffolk.

Customs and Excise has yet to lay down firm rules on the Chancellor's move, which allows registered owners of racehorses to reclaim VAT on yearling purchases in Britain. This saves owners 17.5 per cent of the purchase price.

Mr Allan said the partnerships would not be directly registered for VAT exemption on buying because the membership fees would then attract VAT, and because it might conflict with some individuals' tax status.

However, he said his lawyers were looking at indirect ways of enabling the partnerships to enjoy the VAT break.

One way might be a purchase-lease system, with a registered owner buying horses and then leasing them to the partnerships.

News from the sales rooms suggests that the Budget has given the industry a boost. Buying at last week's auctions at Doncaster for two- year-olds in training was strong, in stark contrast to last autumn when many sellers avoided auctions.

Henry Beeby, director of Doncaster Bloodstock Sales, said: 'The VAT changes changed the mood of people in general. It was a shot in the arm that we needed.' Nearly 90 horses were sold on the first day, with only a handful of withdrawals. On the second day 88 were sold.

Mr Beeby said: 'This is the first major sale where there has been a positive upturn for a couple of years.'

He said turnover over the two days was 54 per cent up and prices were 9.8 per cent higher than last year. The average price was pounds 7,800.

(Photograph omitted)