The new Finance Bill (Feb. 1st 2007, see www.finance.gov.ie) has announced that Irish Stud farmers are going to have to start to pay tax on their earnings. The new tax, at 12.5%, is expected to be a lucrative money spinner for the government. Last year it’s estimated that stallion fees were in the region of €28m alone.
A new taxation scheme that begins Aug. 1, 2008, will allow stallion owners to write off either the cost or the value, whichever is relevant, of their horses over the first four years at stud. Earnings after this point will be taxed, at 12.5% if the horse is owned by a company, or at the personal rate if owned by an individual or individuals. Where horses are in corporate ownership, dividends or other payments from these companies will be subject to income tax.
So, it’s “Goodbye” to the free ride that the horse industry has enjoyed for over 30 years !