New investors, who purchase high-priced yearlings (thoroughbred and standardbred) with the intention of breeding for profit, will be able to claim income tax deductions as if they were operating an existing bloodstock breeding business.
However, if the yearling is later sold, any profit from that sale will be subject to income tax.
High-priced thoroughbred yearlings
A high-priced thoroughbred yearling must be purchased at Karaka 2026 from Book 1 and cost more than:
| Fillies | Colts |
|---|---|
| $375,000 | $391,000 |
High-priced standardbred yearlings
A high-priced standardbred yearling must be purchased at National Standardbred Yearling Sales, Auckland or Christchurch 2026 and cost more than:
| Fillies | Colts |
|---|---|
| $135,000 | $165,000 |
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 2026 Book 1 or National Standardbred Yearling Sales, Karaka or Christchurch 2026.
To be eligible for deductions, investors must provide evidence within 4 months of purchase that they intend to make a profit from breeding the high-priced yearling.
Information we need when you notify us you intend to breed for profit
- Notification of intention to breed.
- Sale and purchase documentation, including lot number, sale name and horse identification (for example colt or filly, dam and sire).
- 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.
- Contact details - physical address, phone number, e-mail address.
- Financial statements' balance date.
- Owner's founding documents (syndicate or partnership agreement).
- Breeding business plan:
- a description of the business
- the research done before purchase and previous knowledge of the industry
- location of activity
- information on how horse is to get to breeding state (or how horse is to be raced, and its racing management)
- where and when horse is to commence breeding, who will manage this and how
- financial forecasts
- involvement of racing, breeding or syndicate manager (overall management of horse).
- Veterinarian reports:
- A copy of the veterinarian certificate for syndicates who must operate in accordance with the 'Bloodstock Syndication Code of Practice’.
- For all other syndicates, confirmation that an external physical examination was done by a veterinarian before purchase and the details of the veterinarian who did the examination.
- 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
- If the horse is gelded or deceased, a copy of the vet invoice noting the date of gelding or death.
- If the horse is exported, a copy of the export documentation.
- Copies of any change of ownership forms.
- All communication relating to any change of intention to breed.
- Financial statements (or financial statements summary IR10 form, where no other financial statements have been prepared), tax reconciliations and bloodstock schedules.
Please contact us if you have any questions.