Accelerated write-down rates for shuttle stallions

Sections EC 41, EC 41(1)(b) and EC 41(1B) of the Income Tax Act 2004, and sections EC 41, EC 41(1)(b) and EC 41(1B) of the Income Tax Act 2007

Changes have been made to the write-down rules for bloodstock in relation to shuttle stallions.

Background

Shuttle stallions are stallions that are owned overseas but are brought to New Zealand for a breeding season. Previously, if shuttle stallions had been used for breeding in New Zealand and were subsequently bought by a New Zealand breeder, they had to be written down over five years, even though they were new to New Zealand ownership. This was not consistent with the treatment of stallions that had previously been used for breeding, but not in New Zealand. If such stallions were purchased by New Zealand studs, they could be written down over two years, or at a 75 percent reducing value.

Key features

Section EC 41 of the Income Tax Act 2004 and the Income Tax Act 2007 has been amended so that shuttle stallions are included in the list of types of bloodstock that can be written down as if they were new to breeding in New Zealand, despite having been used for breeding in New Zealand in the past. Accordingly, shuttle stallions qualify for the same write-down rates as other stallions that are new to New Zealand ownership.

Application date

The amendments apply to shuttle stallions purchased on or after 1 August 2007.