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New investors in standout yearlings (thoroughbred and standardbred), acquired with the intention to breed in the future for profit, will be able to claim income tax deductions as if they had an existing bloodstock breeding business. Investors will also be taxed if the standout yearling is subsequently sold.

Standout thoroughbred yearlings

A standout thoroughbred yearling must be acquired at Karaka 2024 from Book 1 and cost more than:

 Fillies Colts 
 $362,000 $353,000 

Standout standardbred yearlings

A standout standardbred yearling must be acquired at National Standardbred Yearling Sales, Auckland or Christchurch 2024 and cost more than:

Fillies  Colts 
 $135,000 $164,000 

The new investor can claim income tax deductions if they acquire a yearling through a syndicate that is set up for breeding, or the yearling is subsequently syndicated following its purchase at Karaka 2024 Book 1 or National Standardbred Yearling Sales, Auckland or Christchurch 2024.

To be eligible for deductions, the investor must provide us with evidence within 4 months of acquisition that they intend to make a profit from breeding the high-priced yearling.

Information required when notifying us of your intention to breed for profit

  1. Notification of intention to breed.
  2. Sale and purchase documentation, including lot number, sale name and horse identification (for example colt or filly, dam and sire).
  3. IRD and GST numbers of the owner. If there are multiple owners (for example, a syndicate or partnership), provide details of the entity and all individual owners.
  4. Contact details - physical address, phone number, e-mail address.
  5. Financial statements' balance date.
  6. Owner's founding documents (syndicate or partnership agreement).
  7. Breeding business plan:
    1. a description of the business
    2. the research done before purchase and previous knowledge of the industry
    3. location of activity
    4. information on how horse is to get to breeding state (or how horse is to be raced, and its racing management)
    5. where and when horse is to commence breeding, who will manage this and how
    6. financial forecasts
    7. involvement of racing, breeding or syndicate manager (overall management of horse).
  8. Veterinarian reports:
    1. A copy of the veterinarian certificate for syndicates required to operate in accordance with the 'Bloodstock Syndication Code of Practice’.
    2. For all other syndicates, confirmation that an external physical examination was carried out by a veterinarian before purchase and the details of the veterinarian who performed the examination.
  9. Any other relevant communication within the syndicate before filing the application for a deduction for the cost of the high-priced bloodstock.

Information required with change of intention

  1. If the horse is gelded or deceased, a copy of the vet invoice noting the date of gelding or death.
  2. If the horse is exported, a copy of the export documentation.
  3. Copies of any change of ownership forms.
  4. All communication relating to any change of intention to breed.
  5. Financial statements (or financial statements summary IR10 form, where no other financial statements have been prepared), tax reconciliations and bloodstock schedules.

Please contact [email protected] if you have any questions.

Last updated: 30 Nov 2023
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