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EC 45: Residual value of bloodstock
or “Minimum tax value for racehorses and breeding horses”
You could also call this:

“Rules for treating racing bloodstock as part of your breeding business”

If you own bloodstock and use it for racing in a year when you’re also in the business of breeding bloodstock to sell or trade, the law treats this racing as part of your breeding business.

If you’re not actually using the bloodstock for your breeding business when you race it, you can ask the Commissioner to treat it differently.

If you think your bloodstock won’t be able to breed in the future, using it for racing isn’t considered part of your breeding business. But if you do use it for breeding, you can ask the Commissioner to count it as part of your business.

You need to ask the Commissioner within one month of when you first get the bloodstock ready for racing or when you first race it, whichever happens first. You’ll need to give the Commissioner any information they ask for to support your request.

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Next up: EC 47: Change of use of bloodstock in course of business

or “Rules for changing how you use horses in a breeding business”
Next

Part E Timing and quantifying rules
Valuation of livestock: Definitions

EC 46Use of bloodstock for racing

  1. If in an income year a bloodstock owner uses bloodstock for racing, and they are in the business of breeding bloodstock for sale or exchange, the use of the bloodstock for racing is treated as use in the course of the business.

  2. If bloodstock used in an income year for racing is not actually used in the course of a business of breeding bloodstock for sale or exchange, the bloodstock owner may apply to the Commissioner to have the use of the bloodstock treated other than under subsection (1).

  3. If a bloodstock owner expects that bloodstock will not be able to be used for future breeding, the use in an income year of the bloodstock for racing is not treated as use in the course of a business of breeding bloodstock for sale or exchange. However, if the bloodstock owner uses the bloodstock in the course of their business of breeding bloodstock for sale or exchange, they may apply to the Commissioner to have the use of the bloodstock treated as use in the course of the business.

  4. The application must be made with the supporting information that the Commissioner requires within 1 month after the day on which the bloodstock is first prepared for racing by the bloodstock owner or the day on which it is first raced by the bloodstock owner, whichever is earlier.

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Notes
  • Section EC 46(1): amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on , by section 242(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
  • Section EC 46(2): amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on , by section 242(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
  • Section EC 46(3): amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on , by section 242(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
  • Section EC 46(4): amended, on , by section 14(1) of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).
  • Section EC 46 list of defined terms apply: inserted, on , by section 14(2) of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).