• Who is supplying an animal to race?

    Who is the entity racing an animal?

    For source of ATO view, refer to the general application of the principles in the following rulings:

    The supplier of an animal for racing may be a single entity or comprise multiple entities. An ownership group may in certain circumstances be regarded as a separate and distinct entity. Each case involving multiple entities needs to be carefully considered.

    For an ownership group to be regarded as one entity they must either be:

    1. a body corporate
    2. a partnership as defined for tax law
    3. an unincorporated association or body of persons.

    A legal entity such as an individual or a company will be an entity.

    A partnership for income tax purposes will also be an entity. A partnership is an association of persons carrying on business as partners or in receipt of ordinary income or statutory income jointly. It should be noted that any GST obligations of a partnership will be imposed on each partner of that partnership.

    An unincorporated association or body of persons is an entity for GST purposes.

    The characteristics that will indicate that it is an unincorporated association or body of persons that is the entity supplying the animal to race include:

    • there are members of the association
    • there is a contract binding the members among themselves
    • there is a constitutional arrangement for meetings of members and for appointing officers
    • members will normally be free to join or leave the association
    • the association will normally continue in existence independently of any change to the composition of the association
    • as a matter of history there will have been a moment in time when a number of persons combined to form the association
    • the association has a separate identity to that of its individual members, and
    • there is a separate bank account and financial records for the association.

    No one indicator is decisive and the outcome will be as a result of weighing up all the relevant indicators.

    Any GST obligations of an unincorporated association or body of persons will be imposed on each member of the committee of management of that association.

    If a single entity races a number of horses, this will be treated as one entity involved in the activity of racing. The entity test is applied to the ownership group.

    The entity for ABN and GST purposes in the racing industry is the same as the entity for income tax purposes.

      Last modified: 17 May 2013QC 16398