Is your horse breeding enterprise a business or a hobby?
If you answered business to this question you may/may not be aware that the Australian Tax Office (ATO) is making it more difficult to offset any losses from your horse breeding activity against your other assessable income.
Recently the ATO disallowed a Randwick Bloodstock client the ability to offset their horse breeding activity losses against their other income. Our client appealed this decision.
The appeal was upheld because the ATO decided that our client's activity met the general indicators of a business, this being supported by a number of characteristics including in the ATO's own words, "you made a profit from the horse breeding activity in the previous income tax year" and "you obtain and receive professional industry advice from Randwick Bloodstock Agency".
The ATO noted in their judgement that "the Agency has provided you with advice and recommendations to make your thoroughbred breeding venture more profitable. It included things such as:
- Purchase recommendations
- Stallion mating recommendations
- Farm management
- Horse husbandry and
- Stock selling advice"
If you feel your horse breeding activity could benefit in any way from some professional industry advice, please do not hesitate to contact Brett Howard to discuss your requirements.
