Do horse owners pay tax on winnings?

As a hobby owner, all prize money is tax free. You will also be pleased to know hobby owners are free from capital gains tax on the sale of your horse.

teamthoroughbreds.com.au - How to buy a racehorse?

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Frequently Asked Questions

Have you ever dreamed of owning a racehorse? Well, it's an exhilarating and extremely enjoyable lifestyle that is within every person's reach. Racehorse ownership is very exciting and can be one of the most memorable experiences of your life. There is nothing more thrilling than being a part of a group of great people and seeing your horse win! Our team will constantly provide regular updates to all the owners; from the beginning of the horse's campaign, right through to the minute before the horse prepares for the race. Then the build-up begins! On Mondays, the first nominations are revealed, so you can see who we are going to race against. On Tuesdays, the weights are out from the handicapper, so we know which weight we will carry. Then, on Wednesdays, the all-important barrier draw, final acceptances and the final fields are given. We can also view which jockey has been chosen for the ride by the trainer. Meanwhile, behind the scenes, the jockey, jockey's manager and the trainer will study the form of the other horses and begin to analyse and form strategies in order to have the best chance of winning the race. On Thursdays, we as owners can formulate our own strategies. The price of all the horses will be published and you can then have a bet on the early fixed odds. On race day, the butterflies are in the stomach because this is the morning you have been waiting for! You get dressed up in your finest and head off to the track for an amazing day out with an anticipated win. It is wonderful to meet with the other owners and the trainer and maybe have a drink or two to calm the race day nerves. It is also considered very lucky to visit your horse in the stables before it races. Here are some answers to frequently asked questions to provide you with more insight into owning a racehorse.

What happens on race day?

When your horse is racing, you will be provided with:

In accordance with Australian racing regulations, owners who have a share of 5 percent or more, are named in the race book (or race programme) when their horse is running. If the horse wins the race, all owners and guests are invited by the turf club into the "winners circle" lounge bar for a few celebratory drinks and to view the playback race video. Team Thoroughbreds horses, race in the colours of Yellow with Black sleeves, Blue Diamond Logo and Black Cap. They are the original Robinson family colours.

How do I receive communication & updates?

At Team Thoroughbreds we embrace and understand technology as an essential tool to keep our owners informed with up to date news and vision of your horse's progress. We understand that racehorse owners come from all different backgrounds and that your daily commitments might not always allow you to be present, but with email and videos, we can make it just like being there - receiving the information delivered straight from the horse's mouth i.e. the Trainer. We pride ourselves on the high standard that has been set regarding our communication with you, and we believe that it is essential in gaining the maximum thrill and experience.

Team Thoroughbreds will provide regular and comprehensive training updates.

Weekly audio updates from trainer when your horse is in full training.

Notification of any Jump out or Trials for your horse.

Notification of race nominations and acceptances.

Post-race performance appraisals including feedback from the jockeys and trainers.

What happens with prize money?

All prize money is distributed directly to our owners' nominated bank accounts.

Team Thoroughbreds takes no fees from prize money won by your horse. It's distributed pro rata based on the size of the share you own. As a hobby owner, all prize money is tax free. You will also be pleased to know hobby owners are free from capital gains tax on the sale of your horse. Racehorse ownership costs alone do not constitute a tax deduction under Australian Tax Law. When combined with racehorse breeding or racehorse training, some costs may become tax deductible. We suggest you obtain your own personal tax advice that suits your own individual trading and investment structures.

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In accordance with Australian racing regulations, the trainer receives 10% of prize money and the jockey receives 5%.

Who names the horse?

All members of the new syndicate are invited to submit one name. When all those names are compiled, they are sent back to all the owners who will vote for the most popular name. Once a year, there will be a naming BBQ to reveal each yearling's name. This is a wonderful chance to meet all the other owners.

How much does It cost to maintain a share?

Training, transporting your horse to the races, trial and race nominations, open days and vet visits (although, very occasionally certain vet procedures may incur a small additional fee), it costs $40 per week on average over the course of a year. However, this does not include nomination fees for Group and some Interstate races. We certainly hope this is an additional cost that we encounter! A group race means considerable prize money and indicates that your horse has ability! All additional costs are always discussed with the owners and the trainer prior to such decisions being made. Total yearly expenses to train a race horse vary depending on how many race starts and visits from the vet your horse requires. However, on average it is approximately $30,000.

We advise that you budget $40 per week for every 5% share.

PAPERWORK & PAYMENTS

Ezidebit are our billing service providers. An Ezidebit Direct Debit Agreement will be emailed to you. It's the simplest and most secure procedure.

How do I buy a share?

Choose one of our current racehorse shares for sale and contact us to discuss your options. Enquire now. One of our Team members will contact you to discuss your options (including horses and share sizes available). You will be sent out one of our Ownership Packs (including Product Disclosure Statement), organised from The TTSC Racehorse Syndication Service TTSC is the holder of an ASIC issued AFSLACN 112 056 032 | Australian Financial Services Licence No. 288 213. The TTSC is in compliance with national ASIC regulations. Complete the required paperwork and lodge forms and payment with the TTSC. (This is an integrity measure the TTSC holds your money in trust until the horse is fully subscribed and if all shares are not sold within 6 months, you will be fully refunded). You will receive a personal login and password and will begin to access communication updates about your horse's progress as soon as your registration has been acknowledged. Most of our owners like to have a share in more than one horse. The major benefit being that while one horse is in the paddock, the other could be out at the track earning you prize money.

When will my racehorse start racing?

We aim to race our horses as early as possible. However, this depends on the trainer and many factors, including growth, maturity, age, size, education and speed. All horses are different. Some horses develop earlier and others mature late and for this reason there is no correct answer. Your horse will race only when they are ready. This careful consideration prevents the disappointment of a horse not performing well or breaking down. It is far more rewarding to wait a few more months for your horse to run.

What happens when my horse stops racing?

A colt, stallion or mare with a successful racing career, may be retired to stud duty much earlier for the greater value. Generally, the very top colts are retired early Golden Slipper Winner "Vancouver" sold for more than $40 million to Coolmore Stud and was also a Gold Coast Magic Millions Yearling purchase for $185,000. Golden Slipper Winner "Sebring" sold for $30 million to Widden Stud and was a Magic Millions purchase of only $130,000

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"Zoustar" sold for $20 million to Widden Stud and was purchased at Magic Millions for only $130,000 Mare "Sweet Idea" cost $240,000 as a yearling. Sweet Idea's track career was cut short this year by injury but the mare managed to make $2.4 million in prize money over two years, claiming eight wins from 19 starts. The horse just sold for 1.6 million as a broodmare for breeding. Offers to purchase a racehorse occur frequently from Australian and International buyers. If there are offers to purchase any horses, we will advise all owners of the offer for their consideration. A simply majority rules decision making process will determine whether it is sold or we continue racing. At the end of the thoroughbreds racing career or when we decide as a group that the racehorse is not up to being competitive in the country or city meetings, we will sell each racehorse at market value, and return all excess funds back to each owner in the percentage of their ownership.

What happens if my circumstances change?

All owners have the right to sell their share to any prospective purchaser for whatever consideration the two parties agree upon. However, the new owner must abide by the existing Partnership Agreement and Terms and Conditions. If an owner chooses not to leave the Syndicate until they have sold their share, that owner remains liable for monthly fees. If you find yourself in a situation where you need to sell your share due to personal or changing financial circumstances, then we can aid you in doing so. All aspects of the sale including price, market conditions and time frame are discussed with the selling client in order to obtain the best result possible.

Will I have to pay tax on my racehorse share?

If you become a racehorse owner it is almost certain your horse interests will be classed as a hobby by the Australian Taxation Office (ATO). This means that receipts or expenses relating to your racing activities will not be assessable or deductible for tax purposes. The exception, which can be potentially very costly, is in regard to Capital Gains Tax (CGT). Because a racehorse (or share in a horse) is viewed by the ATO as a 'personal use asset', the tax ruling states that if you paid more than $10,000 for your share then you are liable for CGT if there is any gain on the sale of this horse. This $10,000 limit only includes the purchase price and not costs related to training and maintenance. The main circumstances where your horse interests may be considered a business is if you engage in breeding, training and/or trading. In these circumstances it is worth getting advice from an advisor with experience in this area.

Case Study

Imagine you are lucky enough to buy a share in a 10 per cent share in a horse for $18,000 which goes on to win the Golden Slipper. Your share in the prizemoney from that race would be worth almost $200,000, all of which is not taxable. But then you receive an offer from a stud farm wanting to buy your colt for $20 million. If you decide to sell, your $2 million share is liable for CGT (estimated to be $450,000). With careful planning this tax situation may have been avoidable. For example, a couple could have split the share taking 5% each ($9,000 per person) bringing them under the $10,000 threshold.

teamthoroughbreds.com.au - How to buy a racehorse?

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