crustyngrizzly

Capital Gains Tax

57 posts in this topic

If you claim the GST on expenses related to that horse, then the horse will be considered a business asset and gains will be taxable.  If you do not claim the GST on expenses then the horse will be considered a personal chattel and no capital gains tax will be payable.

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2 hours ago, Tauhei Notts said:

If you claim the GST on expenses related to that horse, then the horse will be considered a business asset and gains will be taxable.  If you do not claim the GST on expenses then the horse will be considered a personal chattel and no capital gains tax will be payable.

So if the horse is no good and is a business asset can you get a Capital Gains Tax refund on the purchase price when you sell it on????

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1 hour ago, ardentbuzz said:

So if the horse is no good and is a business asset can you get a Capital Gains Tax refund on the purchase price when you sell it on????

That would be the logical thing but there is no way that will occur. Same as if a rental property losses value. Cullen's view will be "suck it up".

The big question for industry will be, will this effectively kill the "pin hook" business

From what I have seen the rural and provincial people will be hit the hardest.

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Question for Mr Notts

So if I buy a yearling for $50,000, and it turns out to be a champion racehorse ( most of mine are ) then in turn becomes a champion sire ( uncharted waters here but you never know ) will I have to pay CGT on the improved value of my stallion under the following scenarios

1. I syndicate him for 20 million when he finishes racing 

2. I keep him and stand him at stud but gift the host stud 20 services a year

3. I just keep him and sell service fees at $50,000 a pop, 150 a year, until he dies 

Thanks for your valuable opinion Mr Notts 

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In my opinion that case would rest on whether the purchasers of the $50,000 yearling were registered for GST.  If they were not registered for GST then I am sure the windfall profits would be tax free.  And, when the horse was syndicated it should be structured in such a way that you can get the big big depreciation allowances on that stallion.  Once you have a stallion at stud that horse is no longer a personal chattel, as the term personal chattel is written about in Cullen's Paper.  There was a Taxation Review Authority case concerning Mannix, in about 1974, that covered that.

But, if the purchasers of that $50,000 yearling were registered for GST then those windfall profits would be taxable income, for they would be in the business of trading horses and the horses would no longer be called personal chattels.

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1 hour ago, Breeder said:

Extremely good questions pfp. 

Thank you Breeder

I’m more than a bit worried that Whiskey Winston may ( if he supported this CGT ) put a very large knife in the back of any potential stallion investors 

That said Whiskey’s had more flip flops than a jandle factory so I wouldn’t go necking yourself just yet, if you’re in the stallion breeding game that is. 

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P4P - I don’t think Mr Notts quite has a grip on things taxable, but I would suggest that Mr Cullen thinks that if you gain you pay, but if you don’t gain, you also don’t get to claim. That’s all fair as far as he is concerned.......It will have as much chance to get off the ground as a walrus.

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8 hours ago, John Clydesdale said:

P4P - I don’t think Mr Notts quite has a grip on things taxable, but I would suggest that Mr Cullen thinks that if you gain you pay, but if you don’t gain, you also don’t get to claim. That’s all fair as far as he is concerned.......It will have as much chance to get off the ground as a walrus.

You mean,  like Kiwibuild?

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11 hours ago, John Clydesdale said:

P4P - I don’t think Mr Notts quite has a grip on things taxable, but I would suggest that Mr Cullen thinks that if you gain you pay, but if you don’t gain, you also don’t get to claim. That’s all fair as far as he is concerned.......It will have as much chance to get off the ground as a walrus.

Me Cullen has the exact same disease every socialist ( Labour government ) has, he thinks he knows how to spend your money better than you do, and he thinks the government can tax its way into prosperity .....all it does is try to rectify the uneven distribution of prosperity by creating an even distribution of misery .... but every nine years we elect these lunatics from Grey Lynn / Ponsonby so they can impose their warped values and grubby liberal habits on us.

We never learn.

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An interesting bit from a NewsHub article by Ryan Bridge. It looks like Cullen is back peddling a bit or he is indirectly telling us he was acting under riding instructions.

"The CGT includes business gains on the sale of businesses. This is the most controversial aspect of the plan.

Cullen told me yesterday it is his least favourite option because the compliance costs on businesses are estimated to be worth anywhere up to $1 billion."

 

 

 

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8 minutes ago, Breeder said:

An interesting bit from a NewsHub article by Ryan Bridge. It looks like Cullen is back peddling a bit or he is indirectly telling us he was acting under riding instructions.

"The CGT includes business gains on the sale of businesses. This is the most controversial aspect of the plan.

Cullen told me yesterday it is his least favourite option because the compliance costs on businesses are estimated to be worth anywhere up to $1 billion."

 

 

It’s quite subjective valuing a business, I think as part of the report they were exploring the idea but the compliance costs compared to the revenue raised would probably make it barely worth while. 

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1 hour ago, poundforpound said:

Me Cullen has the exact same disease every socialist ( Labour government ) has, he thinks he knows how to spend your money better than you do, and he thinks the government can tax its way into prosperity .....all it does is try to rectify the uneven distribution of prosperity by creating an even distribution of misery .... but every nine years we elect these lunatics from Grey Lynn / Ponsonby so they can impose their warped values and grubby liberal habits on us.

We never learn.

Labour Govts are progressive(apart from fake ones like Rogernomics).

National Govts retain the status quo,and primarily enact  legislation to enrich a minority.They are very good at embedding urban myths as to them being 'sound financial managers',and a' safe pair of hands'.Good PR and plumbing new depths in black ops are hallmarks of the last Nat Govt.

 

Most of the good things average NZ'ers enjoy,healthcare,education,minimum wage,holidays,are a result of Labour initiatives.

 

National are very good at disowning their ex leaders and P.M's...Muldoon,Bolger,Shipley...(add Key..soon) as they contour their principles  frequently to reflect popular voting patterns.

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9 minutes ago, flockofewes2 said:

Labour Govts are progressive(apart from fake ones like Rogernomics).

National Govts retain the status quo,and primarily enact  legislation to enrich a minority.They are very good at embedding urban myths as to them being 'sound financial managers',and a' safe pair of hands'.Good PR and plumbing new depths in black ops are hallmarks of the last Nat Govt.

 

Most of the good things average NZ'ers enjoy,healthcare,education,minimum wage,holidays,are a result of Labour initiatives.

 

National are very good at disowning their ex leaders and P.M's...Muldoon,Bolger,Shipley...(add Key..soon) as they contour their principles  frequently to reflect popular voting patterns.

Run out of your medication have you ? .   and presumably living in a state owned caravan.....

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5 minutes ago, flockofewes2 said:

Most of the good things average NZ'ers enjoy,healthcare,education,minimum wage,holidays,are a result of Labour initiatives.

 

Most of the bad things are as a result of labour initiatives.

Soaring social welfare costs, lower crime sentances, poor infastructure spending,  foreign policy disasters. increasing refugee's, reintroduction of trade unions, 

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2 hours ago, poundforpound said:

Run out of your medication have you ? .   and presumably living in a state owned caravan.....

very poor attempt at challenging the proposition.

Mind you it is based on sound foundations.

 

Do not waste your ad hominum epithets.

 

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2 hours ago, barryb said:

Most of the bad things are as a result of labour initiatives.

Soaring social welfare costs, lower crime sentances, poor infastructure spending,  foreign policy disasters. increasing refugee's, reintroduction of trade unions, 

Not one thing you mention qualifies for any objective critique.i.e you cannot sustain your fallacious position.

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You have clearly forgotten the healthy position National left this mob :

So Grant Robertson has been gifted almost the strongest set of Government books in the OECD. Some key data:

  • Tax revenue up 6.1% and expenditure up 5.5%
  • Average wages up 3.0%
  • Jobs up 3.7%
  • OBEGAL surplus of $5.5 billion
  • Total surplus of $8.4 billion after accounting for investment gains
  • Net debt down $2 billion, decreasing from 21.7% to 19.9% of GDP

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8 minutes ago, Ohokaman said:

You have clearly forgotten the healthy position National left this mob :

So Grant Robertson has been gifted almost the strongest set of Government books in the OECD. Some key data:

  • Tax revenue up 6.1% and expenditure up 5.5%
  • Average wages up 3.0%
  • Jobs up 3.7%
  • OBEGAL surplus of $5.5 billion
  • Total surplus of $8.4 billion after accounting for investment gains
  • Net debt down $2 billion, decreasing from 21.7% to 19.9% of GDP

The reality is that Govts have little direct impact on the economy compared to factors like interest rates,forex rates and international events.

 

As for being' gifted 'a strong set of books'...English acknowledged that fact when he succeeded Cullen as M.O.F.

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