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Income Tax Act 2007

Timing and quantifying rules - Valuation of livestock - Definitions

EC 47C: When prospective breeders treated as being in breeding business

You could also call this:

“Rules for treating prospective horse breeders as operating a breeding business”

If you want to start breeding horses for racing or other purposes, you’re called a prospective bloodstock breeder. The law says you’re treated as if you’re running a breeding business from the day you buy special horses to start your breeding operation. These special horses are called stud-founding bloodstock.

You’re considered to be in this business until one of these things happens:

You actually start your breeding business using these special horses.

You’re treated as if you’ve sold these horses under [section EC 47(1)].

You’re treated as if you’ve sold these horses under [section EC 47B].

You’re treated as if you’ve sold these horses under [section EC 47D].

You start a breeding business using different horses, but only if the Commissioner has said it’s okay for your special horses to be part of this business under [section EC 47E].

Even though you’re treated as if you’re in a breeding business, any other horses you own during this time aren’t considered part of your breeding business.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS178904.

Topics:

Money and consumer rights > Taxes

Business > Industry rules

EC 47B: Removal of high-priced bloodstock from New Zealand after earlier deductions, or

“Tax consequences for exporting expensive racehorses before use in New Zealand”

EC 47D: Change of prospective bloodstock breeders’ expectation or intention after earlier deductions, or

“Tax rules for racehorses bought for breeding but no longer used for that purpose”

Part E Timing and quantifying rules
Valuation of livestock: Definitions

EC 47CWhen prospective breeders treated as being in breeding business

A prospective bloodstock breeder is treated as having, and carrying on, a bloodstock breeding business on and from the day on which the prospective bloodstock breeder acquires stud-founding bloodstock until the earliest of the following days:
the day on which the prospective bloodstock breeder commences a bloodstock breeding business using the stud-founding bloodstock:
the day on which the prospective bloodstock breeder is treated as having disposed of the stud-founding bloodstock under section EC 47(1):
the day on which the prospective bloodstock breeder is treated as having disposed of the stud-founding bloodstock under section EC 47B:
the day on which the prospective bloodstock breeder is treated as having disposed of the stud-founding bloodstock under section EC 47D:
the day on which the prospective bloodstock breeder commences a bloodstock breeding business using bloodstock that are not stud-founding bloodstock, if the Commissioner has approved an application under section EC 47E for the stud-founding bloodstock to be treated as being used in the course of the business.

Despite subsection (1), if the prospective bloodstock breeder owns bloodstock that are not stud-founding bloodstock during the period of time described in that subsection, those bloodstock are not treated as part of the prospective bloodstock breeder’s bloodstock breeding business.

Notes

Section EC 47C: inserted (with effect on 1 January 2019), on 18 March 2019, by section 162(1) (and see section 162(2) for application) of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).