SARS & HORSES

?......makes one wonder how a guy like St. John Gray does it .......owner trainer breeder with 5 BAR worth of stakes pa......what does one write off against that.......must have a formula so that the tax man gets left with the bone.....:S

Ok guys i hope i can answer all your questions in as plain terms as possible.

Owning the horses personally

In the 2013 tax year, if your taxable income is below the top bracket of R617k before any assessd losses, no loss regardless of what business you run can be ringfenced.

If your income is above the R617k, SARS may ringfence the the losses if 3 out of the 5 years do not show a profit.

You pretty much dead in the water though for losses if you carry on what SARS deems a suspect trade. These losses may not in any circumstance be used agaisnt your income. There is a list but horse ownership does not form part of this.

If you own the horses through a company

SARS may only ring fence the losses if you are not showing a profit for 3 out of a 5 consecutive year period.

So Garrick - The only way SARS can ring fence your losses if you have made losses for 3 out of 5 years and have a taxable income over R617k.

Interesting reading....

www.saica.co.za/integritax/2005/1327_Rin..._assessed_losses.htm

Ring fencing was being abused, especially within the horseracing industry (and agricultural sector to an extent) and remained unfair to most other taxpayers; prior to and after corporatisation.

Is that disputable?

Until the legalisation of all forms of gambling, horseracing remained a suspect operation. In this regard, 'bucket shops' and 'underhand' bets with bookies were common not spoken of practices.

Subject to dispute again?

However, I am certain that if representations were made to SARS, and some semblance given of widespread public participation within the industry, some compromise could have been reached.

Right now, given the non-accountability to the public by the closed-shop operators/industry administrators.... a 'suspect trade' it remains.