WELCOME TO 'STABLE TALK',
STABLE FINANCIAL'S QUARTERLY NEWSLETTER

Please note, our offices will be closed from midday
Thursday 23 December 2010 and will re-open on
Tuesday 4 January 2011.

STAFF NEWS
Some Congratulations are in order here at The Stable:
Congratulations to Gus Contessotto and his wife
Georgia on the birth of their son Raphael and to
Katie Bond on achieving her CPA Designation.

Many years ago we decided to cease noticing "client successes" with the fear that we may miss some. However, it is worth taking that risk this year to make specific reference to some outstanding achievements by Stable clients during the 2010 spring carnival. Congratulations to these gems;

1. Gerry Ryan of Limerick Lane for winning the Melbourne Cup with Americain.
2. Rick Jamieson of Gilgai Farm for breeding the world's best sprinter in Black Caviar.
3. Kevin and Tanith O'Brien of Lauriston Farm for breeding the Maribyrnong Plate 2yo winner off a $1,000 service fee with Arctic Command (By Freeze). They have a mortgage on this race having bred the 2009 winner from the same Dam.
4. Murray and Bjorn Baker as trainers of the Derby winner, Lion Tamer.

Apologies to those we may have missed that have also enjoyed such outstanding achievements on the track.

Is enough being done to attract "new" racing and breeding participants? Arguably there is no better time to get involved as buyers currently enjoy favourable economic conditions. Also, our product is looking pretty good on an international scale – we currently boast the best sprinters in the world – Black Caviar, Sacred Kingdom and Starspangledbanner all originating from Victoria.

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The Australian Taxation Office (ATO) have tightened their previously lenient approach to granting taxpayers the ability to enter into payment arrangements for tax liabilities. This applies to individual taxpayers and businesses alike.

During the Global Financial Crisis (GFC) the ATO were forthcoming in allowing businesses to opt into a payment arrangement for outstanding taxation liabilities. This stance was due to the onerous external pressures that businesses and individuals faced during the GFC as sources of funds were scarce. In order not to increase stress for business cash flow, the ATO allowed taxpayers to enter into payment arrangements so as to spread the liability across a longer period of time.

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Many horse owners and breeders have become accustomed to regular scrutiny by the Australian Taxation Office (ATO) so this news will come as little surprise.

Our office in recent months has witnessed a push by the ATO to verify the strict "beneficial ownership" of horse interests. Put simply, the ATO are trying to match official Racehorse ownership records held by Racing Authorities with ABN's/TFN's of tax payers.

It has been reasonably common for horse owners to register a horse in a personal name i.e. Mr & Mrs Horsebreeder. Often this has been done for ticketing purposes for raceday privileges. However, for tax and legal ownership purposes the horse is owned by a company or trust i.e. Horsebreeder Pty Ltd. If the ATO is successful in arguing that the horse is owned by individuals rather than a company the tax outcome could result in a large, unfavourable adjustment to deductions claimed resulting in tax to pay.

Taxpayers with horse interests, as always, need to be careful that they are attending to their obligations properly. A simple solution to this matter is to register a company as a syndicate with the Racing Authorities so that the horses owned by a company or trust are properly reflected in the official ownership records.

Bob Bentley and the team at the Australian Racing Board should be commended once again for their quality publication, Australian Racing Fact Book.

The 2010 Fact Book was recently released and is a set of facts and figures that provide a great snapshot of the Thoroughbred industry in Australia. Industry trends, breeding information, wagering information, international trends and a directory of key contact numbers are all included in the one publication. There is useful information for all types of racing enthusiasts.

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A total of 68 Group 1 races were contested last season. The average service fee paid to produce the resulting Group 1 winner was $42,586. 35 of the 68 Group 1 winners or just over half of these winners were produced by a Stallion with an advertised service fee of A$30,000 or less.

Obviously this is a simple snapshot but owners and breeders should be encouraged to look behind the statistics as analysis of available information could place you at a competitive advantage in the horse industry.

There have been a number of tough new rules put in place in respect of borrowings by superannuation funds since our last newsletter.

To recap, a SMSF can now borrow to acquire assets that it would normally be allowed to invest in via a limited recourse borrowing arrangement.

The new rules which apply to arrangements put in place after 7 July 2010 allow for the acquisition of a single acquirable asset.

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Stable Financial has become a sponsor of the Racehorse Outplacement Program, run by longstanding client Bill Saunders of Cyberhorse.

Sponsored by Racing Victoria, Equestrian Victoria and Horseland, the Cyberhorse Racehorse Outplacement Program (CROP) is a systematic process to manage the transition from racing to equestrian pursuits for a horse that no longer has a viable career on the track.

Stable Financial has joined the Racehorse Outplacement Alliance, which includes horse industry suppliers, racehorse trainers, equestrian horse trainers and a variety of other supporters to facilitate better outcomes for off-the track horses.

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