Did you raise a glass of Champagne, don a topper or fret over the dress rules for the Royal Enclosure this year? Around 300,000 people made the annual pilgrimage to Berkshire, to bet on horses or even on the colour of HM’s hat during the annual Royal Ascot festival.

Who could resist the glitz and glamour of a true British institution? In this article, Keystone’s horseracing and equine solicitor, Rachel Flynn, provides us with some insight into the fascinating world of racehorse ownership.

A few of those 300,000 may be inspired to splash out on a racehorse – or to buy a share with friends – and these fun and affordable partnerships can give the chance to have a taste of ‘the Sport of Kings’.

For anyone tempted to dabble with limited funds, it is heartening to know that spending power is no guarantee of success. Hydrogen, the most expensive yearling of 2012, bought by Sheikh Fahad Al Thani for a cool £2.6 million, hasn’t troubled the judge in his two races so far; while anyone with a spare £210,000 could have bought 2015’s Derby winner Golden Horn in 2013 when he was offered at public auction. Many successful racehorses have been bought for little money or even given away, proving that you need both luck and judgement to succeed.

The best way to stack the deck in your favour is to choose the right team to help you. Racing has more than its share of colourful characters happy to part gullible would-be owners from their cash. They say: "to make a small fortune in racing, start with a large one" – but where did the expression ‘doing a horse-deal’ come from?

Great British Racing www.greatbritishracing.co.uk or the British Horseracing Authority http://www.britishhorseracing.com are good places to start. Plenty of information is in the public domain, for example www.racingpost.co.uk. References could also be useful – choice of advisor is the single factor most likely to affect an owner’s future enjoyment.

Next, the horse. Many racehorse purchases are made at public auction and a trainer or bloodstock agent will normally bid on their behalf. Owners should be absolutely clear regarding the price they are prepared to go to and the basis on which their agent is instructed to bid on their behalf.

Bloodstock agents will normally charge 5% of the purchase price, but trainers’ terms of purchase vary and they may charge no commission if the animal is to be trained by them. The terms on which the advisor/agent is appointed should not be overlooked. The auction itself will be governed by the sales house’s terms and conditions of sale – the six or so pages of small print at the front of the catalogue – which are also worthy of close scrutiny.

It’s a fact that even hardened businessmen and women can have a blind spot where their hobby or leisure pursuit is concerned although thousands (sometimes hundreds of thousands) are being spent. When the horse is placed with a trainer the owner enters into a contract, but on what basis? The trainer may have his own terms of business, or use the National Trainers Federation/Racehorse Owners Association’s training agreement, or he may have no written terms.

What is the training fee? What extras can you expect? Are there gallop fees? Are veterinary fees all-in? How often can you expect a report on how the horse is getting on? All sensible and important questions which, if not addressed at the start, can lead to misunderstandings – or worse.

It can only be advantageous to owner and trainer to set out the rules of their working relationship right from the start. And with the right building blocks in place, the new owner is ready to embark on the fascinating rollercoaster journey of highs and lows which is racehorse ownership.

Do it properly and racehorse ownership can be everything you dream of – and more.

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This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.