(This page is a work in progress)

Anyone can set up a racehorse syndicate.

Before you embark on this venture, be absolutely sure that you understand the associated responsibilities.

Regardless of whether or not you plan to run this on a not-for-profit or for-profit basis, you are likely to be inviting members of the public (consumers) to join the syndicate. You are bound by law to comply with consumer legislation. Breaching these Regulations can lead to criminal prosecution, so, rather obviously, it is essential that you get this right, from 'the word go'.

Apart from being in your own personal interest, your clients (syndicatees) are more likely to stay with your syndicate enterprise for longer if they can see that your offer is consumer friendly and legally compliant.

STOP NOW - if you do not plan to invite strangers to your enterprise, through a website, an advertisement, word of mouth, or by any other method BUT instead plan to privately invite friends or family, then you are probably creating a PARTNERSHIP, which is a different structure with different (albeit not dissimilar) liabilities.

The most important element of setting up a syndicate is to find the right horse. Having a knowledge of what to look for is IMPERATIVE.

Rather sadly, some people go to the sales to buy a horse that merely matches a budget and are happy to come back with a horse with no scope other than it has four legs and will therefore be ideal for syndication to consumers who will have equally limited knowledge of 'what to look for'. Such syndicate enterprises rarely last long, particularly when/if the horse takes part in races.

Remember that people will be placing their money and faith in your hands. You have a responsibility to get everything right from the outset. Racehorse syndication is not an ideal enterprise for amateurs.

Assuming you know your stuff and you get the syndicate up and running, you become the 'Syndicator' and your customers become the syndicatees. Your solicitor should examine your terms of business.

As a Syndicator, you will need to have a sound business relationship with the chosen trainer of the racehorse. The NTF (National Trainers Federation) insist that there is an agreement with specific terms and conditions between the trainer and the responsible person (in this case - the Syndicator).

Trainers' terms and conditions vary in detail and therefore any lien or relevant condition imposed by the trainer that may influence a syndicatee's decision to join the syndicate, should be properly portrayed by the Syndicator.

If you create a website to publicise your offer to consumers, you will benefit by recognising the importance of transparency. Most consumers who are looking to become a syndicatee, recognise and appreciate the significance of transparency. The most obvious requirements of 'best practice' are that the costs and a full set of terms of conditions are unambiguously portrayed on the website. Consumers are not likely to be impressed if they are obliged to phone for essential information. In other words, the more transparent you are, the greater the chance that you will get the business.

NEVER specify in your marketing material that the purchase of a share in a racehorse is an 'investment'.

If you are creating a leasing arrangement, this needs to be VERY clearly portrayed.

Don't be afraid to relay any bad news as well as all the good news. Most syndicatees are aware that there are generally more downs than ups associated with the training and racing of a racehorse.


Syndicators and racing club businesses are required by law to portray offers to consumers, in a fair and honest manner. There are three relevant elements of consumer protection legislation, the Consumer Protection from Unfair Trading Regulations 2008, the Consumer Rights Act 2015 and the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013.


A Syndicator's Terms and conditions (T&C) should be transparent i.e., expressed in plain, intelligible language, legible and not contradict main body content. Any terms that are not transparent are likely to be considered unfair and therefore unenforceable."

The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 apply to consumer contracts whether agreed at a trader's premises, away from a trader's premises or at a distance (i.e., over the phone or online). In all scenarios they require certain information to be provided to consumers before they enter a contract and if it isn't provided, the trader is likely to be in breach of contract, with the consumer entitled to seek an appropriate remedy. Consumers may also be entitled to a cancellation period when entering contracts concluded away from a trader's premises or via a distance means. Furthermore, the use of premium-rate phone helplines and negative options to sell additional products incidental to the main product, are both prohibited. Syndicators should seek specific legal advice on these matters before formulating terms and conditions.

Best practice dictates that full T&C should be displayed on the Syndicator's website or other marketing devices.

Where a consumer is invited to buy from a website using an ‘add to basket' device or similar, the full T&C should be displayed prior to the commencement of the purchasing procedure. The law states that it is an offence to withhold material information from consumers, thereby impairing their ability to make informed decisions.

Material information is the information a consumer needs to make an informed transactional decision. Therefore, if a syndicator failed to provide a consumer with material information, or did so in a manner that was unclear, unintelligible, ambiguous or untimely, this could amount to a criminal offence under the Consumer Protection from Unfair Trading Regulations 2008.


The BHA specify five categories of ownership registration. These play a key role in determining how Syndicators should portray their offers to consumers.

The BHA ownership structures are as follows:-

The actual BHA registration of an ownership entity cannot be used to mislead or confuse consumers. Therefore, for example, if a 'racing club' business manages to register its ownership with the BHA as a 'syndicate' this does not necessarily entitle the entity to portray itself to consumers as a 'syndicate'.

Where an entity offers more than one of the ownership structures to consumers, the offers must be separately and clearly defined. The business names (or other identifiers) must not create confusion. For example, if the entity has a mixed offering, it would not be best practice to name the business XYZ Syndicates if indeed there are two separate products. For example, although XYZ Racing Club may be a sister business of XYZ Syndicates, the two are totally separate entities, requiring separate sets of Terms and Conditions.

Successful BHA registration of an entity cannot be portrayed in consumer offers as though it is some form of accreditation. For example, a syndicator should not state something like 'BHA registered' as a stand-alone statement.

Note: although a 'Racing Club' is defined by the BHA as an 'ownership entity', this refers to the status of the racing club business, not to the entity's consumer offer.


Any offer must not be misleading, even if it were clarified elsewhere in communications to the consumer. For example, if the arrangement is a racing club (where the members do not acquire ownership rights) any offer must not portray it as bestowing ownership or part-ownership. In such circumstances use of the word 'owner' or a derivative, should be avoided.

In accordance with the BHA definition, the term 'racing club' is reserved for entities selling memberships in an entertainment linked to the club's (the business's) ownership or leasing of a horse and where the club members are not becoming part owners of the horse.

Even though race prize money won by the horse may be shared amongst the members of a racing club, the sale of a membership should not be described as the purchasing of a 'share of a horse' and neither should a member be described as a 'shareholder'.

In the racing syndicates and clubs industry, the term 'share in a racehorse' or 'share', or similar, widely infers the purchase of a share in the ownership of a racehorse or a leasing arrangement of a share involving beneficial ownership of a racehorse.

Describing membership of a racing club (where ownership is not acquired by the consumer) using terminology such as “share” or “shareholder” could constitute an offence.


A syndicator should take reasonable steps to ensure that a horse is in a fit enough condition to withstand training at the point they purchase the horse. By omitting to bring to a consumer's attention to material information, for example that a horse has a known injury potentially preventing it from racing, a syndicator may commit a criminal offence.


Whilst there can be the odd exception to the rule, racehorse ownership is widely acknowledged to be anything but an investment opportunity, it could be misleading to state or imply 'investment' in consumer offers.


The absolute essential is that the division of shares is clearly specified. For example, the syndicate may perhaps be divided into 100 shares of 1% each.

Given that the sale of a share in the ownership of a racehorse is effectively an intangible, it follows that a consumer's reasonable expectation is that the share will be uniquely identifiable.

For example, if the Syndicator has divided the shares into 20 equal 5% units, a reasonable expectation is that the shares will be numbered from 1 to 20.

The Syndicator should maintain a share register for HMRC inspection or where good cause exists, for any legitimate body to inspect.

The register would, for example, list Consumer A as the owner of share no.8, identifiable with a unique number 8/20.

The numbering process serves as a device to help prevent unscrupulous individuals from fraudulently selling a share more than once. A syndicatee receiving a share certificate or other device confirming the purchase of a share, without a unique number, would likely raise a query with an authoritative body.

Where a Syndicator is selling less than 100% of the horse, for example, in conjunction with a racehorse owner with whom an agreement exists to sell a given percentage of the horse, the law requires that this very relevant fact must either be clearly declared in the Syndicator's offer and/or accounted for by including the relevant percentage in the 100% figure. For example Racehorse Owner 'A' may have an agreement to retain 50% ownership of the horse when selling the other 50% to a Syndicator. When the Syndicator subsequently sells a share of their 50% holding, to a syndicatee, the numbering needs to account for the whole 100%. Where the share division is 5%, for example, Racehorse Owner 'A ' could be allocated share numbers 1 to 10 and the syndicatees 11 to 20.

By failing to provide a consumer with material information, such as the percentage of the horse they are purchasing, or not providing it in a clear, intelligible, unambiguous and timely manner, a syndicator may commit a criminal offence under the Consumer Protection from Unfair Trading Regulations 2008.


Pricing relating to the sale of a share in a racehorse must be unambiguously portrayed.

Where there are unknown costs that will be charged to the syndicatee, for example vet bills, the fact that additional payments will be required, must be clearly stated next to the price notification.

VAT treatment must be clearly portrayed (see below).

If possible, the total price (including taxes) must be clearly and accurately displayed but where it can't be worked out in advance, consumers should be made aware of this at the earliest opportunity, certainly before they enter into a contract and they must be informed how any additional charges will be calculated.

The extent of the consumer's financial commitment should be set out from the outset, and their express consent to any additional payments secured before they are charged. Syndicator's must not mislead consumers about the extent of their future commitment, any obligations that will be incurred and the duration of the contract.

As with all other terms, information as to pricing must be clear, intelligible, unambiguous and timely.

Basically, sufficient information about the price of membership should be given to consumers in order for them to decide whether to join the syndicate/club. If sufficient information as to the price is not supplied or is misleading to the extent that the consumer would not have entered into the agreement had they known the correct price, the syndicator is likely to commit an offence.


(This is a complex area with variations to the theme from one Syndicator to another and therefore the following information should be checked with your accountant).

Most Syndicators are VAT registered, given the high sums involved in purchasing and racing a racehorse.

A VAT registered Syndicator can claim back the VAT they have paid to other suppliers, through their syndicate business VAT registration. For example; if they pay £20,000 plus VAT for a horse, they can claim back £4,000 and the refunded sum belongs to them.

The Syndicator then has to account for VAT in the supplies they are making to consumers or businesses. If for example, they divide the shares into 20 x 5% shares, at £1000 each, the £1,000 paid by each syndicatee is subject to VAT at the standard rate (currently 20%).

The VAT registered Syndicator has the option to (a) charge the syndicatee plus VAT on top of the requisite payments, for example £1000 plus £200 VAT = £1200 or the sum could perhaps be (b) inclusive of VAT where the payment is £1000 in total (£833.33 + £166.67 VAT).

If the Syndicator chooses route (a) they must treat the £200 as output tax and if route (b) the output tax amounts to £166.67. The VAT sum collected from the syndicatees, is passed by the Syndicator to HMRC and it is this sum that the syndicatees are entitled to be repaid in full, via the HMRC/BHA VAT concession. The Syndicator merely must follow the HMRC prescribed administrative procedure to trigger the refund entitlement.

In 1992 the BHA (British Horseracing Authority) then known as BHB, brokered a deal with HMRC (Her Majesty's Revenue and Customs) whereby VAT paid could be claimed back by consumers who own or lease a racehorse (with beneficial ownership rights). The racing industry passionately treasures this concession and does not look favourably towards anyone who endangers it by circumventing the spirit or letter of the scheme.

The VAT concession applies to consumer activity and was not designed to be a vehicle to boost the income of a Syndicator.

Under the Rules Of Racing, the Syndicator registers a syndicate on behalf of the members (the shareholders).

HMRC pay VAT refunds to the Syndicator, who then passes the sum to the relevant syndicatees, according to the total sum paid.

Some VAT registered Syndicators mistakenly believe that they can portray their fees as NO VAT or 'not subject to VAT', when they choose not to state a price PLUS VAT. However, this may potentially infringe consumer legislation, because, in reality, there will always be a VAT element.

Given the significance of the HMRC VAT refund entitlement, the Syndicator should succinctly explain the VAT refund scheme within their terms & conditions.

Whilst it is most certainly not recommended, it would appear that it may be a perfectly legal procedure for the Syndicator to retain the syndicatee's VAT refund when the syndicatee specifically agrees to this. However, the big question that a syndicatee may ask is, "why am I writing off my entitlement to my 20% refund?" If the reason given by the Syndicator is 'to keep the initial costs down', then logically, it would appear that the saving must at least equal the sum of the 20% refund. However, if the syndicatee's refund entitlement from HMRC has been transferred by agreement from the syndicatee to the Syndicator, then the Syndicator has to treat the refunded sum as income at the point HMRC pass over the refunded total sum and this then becomes subject to output VAT accounting at 20% and therefore the refunded sum is effectively eroded by 20%.

The syndicatee is likely to ask the logical question, if the 20% refund is keeping the initial costs of the syndicate lower by 20%, but this in turn is eroded by the Syndicator having to give 20% of the 20% back to HMRC, isn't it financially prudent, far simpler and incredibly more transparent for the Syndicator to pay the full sum of the HMRC refund directly to the syndicatee's account, rather than keeping it to defray initial costs.

Where a VAT registered Syndicator speculatively buys a horse at auction (or howsoever) that is sold to them not subject to VAT, the general rule is that the Syndicator still has to account for VAT in full, in relation to the shares they then sell, because it is the Syndicator who is now making the supply to a syndicatee and the transaction is nothing to do with the previous owner of the horse.

Where an arrangement is a 'Racing Club' and the business is a VAT registered entity, the general rule is that the members of the Club do not qualify for VAT refunds under the HMRC/BHA concession because they are not owners or beneficial owners of the racehorse(s).

Advice should be sought from a solicitor and an accountant, when setting up a syndicate business. The content of this website does not constitute legal advice.