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Income Tax Act 2007

Income - Recoveries

CG 8B: Recoveries after deductions for high-priced bloodstock removed from New Zealand

You could also call this:

“Tax on high-value racehorses taken overseas before racing or breeding in New Zealand”

This section of the law applies to you if you’re a prospective bloodstock breeder and you own high-priced bloodstock that you take out of New Zealand. Here’s what you need to know:

If you take your high-priced bloodstock out of New Zealand before it has raced or been used for breeding in the country, and you’ve been allowed a tax deduction for it, you might have to pay some income tax. This only applies if the bloodstock is expected to be used for breeding in the future when it leaves New Zealand.

The amount of income you’ll have to declare is based on the higher of two values: either the market value of the bloodstock when it leaves New Zealand, or the total amount of tax deductions you’ve been allowed for it. From this amount, you subtract any income you’ve already declared related to this bloodstock. If there’s anything left over, that’s the amount you need to declare as income.

You need to include this income in your tax return for the year when the high-priced bloodstock leaves New Zealand.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS178769.

Topics:
Money and consumer rights > Taxes
Business > Industry rules
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CG 8C: Recoveries after deductions for high-priced bloodstock disposed of to non-residents, or

“Tax on selling high-priced race horses to overseas buyers before they're used in New Zealand”

Part C Income
Recoveries

CG 8BRecoveries after deductions for high-priced bloodstock removed from New Zealand

  1. This section applies when—

  2. high-priced bloodstock is removed from New Zealand before being—
    1. first raced in New Zealand:
      1. used for breeding in New Zealand; and
      2. a person who is a prospective bloodstock breeder has been allowed a deduction in relation to the high-priced bloodstock; and
        1. the high-priced bloodstock is expected, at the time of its removal from New Zealand, to be able to be used for future breeding.

          1. The person has an amount of income to the extent to which the greater of the high-priced bloodstock’s market value on the day on which it is removed from New Zealand and the total amount of deductions the person has been allowed in relation to the high-priced bloodstock exceeds the total of any amounts of income the person has derived in relation to the high-priced bloodstock.

          2. The income is allocated to the income year in which the high-priced bloodstock is removed from New Zealand.

          Notes
          • Section CG 8B: inserted (with effect on 1 January 2019), on , by section 133(1) (and see section 133(2) for application) of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).