The article provides a detailed overview of key tax considerations for individuals starting a horse breeding or racing business in Australia, addressing common questions related to income tax and GST. It clarifies that merely owning shares in a racehorse does not constitute a horse business for tax purposes, and outlines the criteria required for an activity to be recognized as a business, such as having a business plan, proper record-keeping, and profit intention. The article also explains the implications of the Non-Commercial Loss rules on deducting losses, the necessity of proving the horse activities are a business even within a company, and the specific conditions under which broodmares qualify for special tax write-offs.

Further, the article discusses operational aspects such as the allowance for racing horses bred within a breeding business if it is ancillary to breeding, the flexibility of business structures including partnerships, and the tax treatment of acquiring mares in-foal or converting hobby stock into business stock. It emphasizes the importance of consulting experienced advisers when setting up the business structure to ensure compliance and optimize tax outcomes. The author, Paul Carrazzo, invites readers to seek further clarification, highlighting the complexity and evolving nature of tax rules in the horse industry.