Question:
I have decided to breed some horses and currently believe this to be a hobby. I’ve incurred approximately £15,000 in costs to date (being purchase of horses, feeds, vets etc). Hopefully, one day I’ll be able to sell the horses to generate income. Should I put these costs on my tax return now and establish the losses, or wait until income is generated and then bring in some costs as pre-trading expenditure?
You should wait until income is generated and bring in the allowable costs as pre trading expenditure. However, under the pre trading expenditure rules, you can only claim if the expenditure is incurred within seven years prior to the commencement of the trade.
