Paul Kehoe (Wexford, Fine Gael)
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224. To ask the Minister for Finance if a person (details supplied) can qualify from income tax under the exemption rules for race horses in training; and if he will make a statement on the matter. [4282/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that the use of land for the breeding of racehorses, hunters etc., on a commercial basis, is regarded as a farming activity for tax purposes with any net profits liable to income tax or corporation tax, as the case may be.

There is no specific income tax relief available for racehorses in training. However, in certain circumstances horse racing can be treated as a hobby activity and therefore not liable to tax. Where a horse is moved to training and that activity is considered a hobby activity, then any profits earned which are associated with the racing activity while a horse is in training (e.g. winnings or sale proceeds) are not liable to tax. This also means that any associated costs incurred, or losses suffered while the horse is in training are not deductible for tax purposes.

This treatment does not apply to horse trainers because it is accepted by Revenue that, where a racehorse trainer who holds a licence trains horses which he or she owns or part owns, the activity is a trading activity. In those circumstances, the expenses of training the horses may be allowed as a deduction in computing taxable trading profits, and any income from prize money or the sale of horses must be taken into account in computing taxable income of the trade.