David Ellis has slammed the NZ Inland Revenue Department in the wake of disappointing results at the NZB National Sales last week.
The Premier Sale slumped with across the board decreases in turnover (- 8%), average (- 5%) and median (- 8%).
The combined aggregate for the Premier, Select and Festival Sales has dropped from $111 million to $69 million in six years.
Ellis was the biggest buyer by far at Karaka. The Te Akau Racing principal purchased 43 yearlings for a total spend of $6.81 million. “The tax department is stifling new investment in the bloodstock industry with its interpretation of depreciation rules,” Ellis claimed. “We are desperate as an industry for government to clarify tax issues. The legislation is so unclear no one knows what to do.
Ellis was behind an investor syndicate that lost a NZ High Court case against the Inland Revenue Department over depreciation on a colt that disappointed as a potential breeder and ended up being gelded.
Last year’s High Court ruling held that because the syndicate had no previous breeding record, IRD could disallow any deductions until foals had been sired.
“The New Zealand industry still gets good results,” he said. “We’ve won international races in Hong Kong, Singapore and Australia but there are alarm bells centred on fresh investment in the industry.”