Thoroughbred Breeders Australia (TBA) has allayed concerns that may arise following an article in Fairfax newspapers on Monday.
Titled ‘Racehorse owners to fight Tax Office’, the overall tone of the article appears misleading. The ATO has not changed its approach to deliberating on the question of ‘business v hobby’.
The article states, “Overturning years of industry practice; the tax office has ruled that breeders who also race their horses are not carrying on a business, meaning they may not use the losses to reduce the tax bill payable on their other income.”
TBA and Aushorse treasurer Adam Tims replied by stating the ATO view on tax matters relating to the thoroughbred industry is still found in its public ruling TR 2008/2. “It is business as usual and each taxpayer’s unique situation continues to be assessed on a case by case basis,” Tims said. “Hundreds of years of case law remain relevant.”
The increased audit activity referred to in Monday’s article is due to greater scrutiny of wealthy Australians rather than a specific crackdown of the thoroughbred industry. It just so happens that many wealthy Australians also compete in the thoroughbred market.
Both the TBA and Aushorse have played strong advocacy roles in the area of taxation and the thoroughbred industry. For decades, the Federal body for breeders in Australia has enjoyed a collaborative approach with the ATO including forming a formal partnership during 2006/07 that culminated in the release of TR 2008/2.
TBA and Aushorse also actively represented breeders during the introduction of GST and more recently the changes to “non-commercial loss provisions”.
“Taxation is a specialised area in our unique industry mainly due to the diversity of its participants’ operations,” Tims said. “Investors in the Australian breeding industry should remain confident that the ATO have not changed their approach in determining the business status of Thoroughbred participants.”
TBA and Aushorse will continue to provide ongoing support to Australian Thoroughbred breeders in all areas including taxation advocacy.