Am I ready?
Here are a few questions you should consider before buying your first horse or share in a horse:read more
How much money am I willing to invest?
Horseracing ownership is great fun but is also highly speculative. While there are some people who make a living out of investing in thoroughbreds, you are more likely to enjoy your experience if you treat ownership as a hobby and consider it discretionary spending. Work out what you are happy to put into ownership and don’t expect a guaranteed return.
What type of owner do I want to be?
If you are somebody who needs to be involved in all decisions, then you may be best going into sole ownership or a small partnership. If you are a novice who is happy to be guided then maybe you should approach a trainer or syndicator about buying a share in a horse with a bigger group.
Who do I want to train my horse?
If you are buying a horse outright or organising a partnership you should consider who you want to train your horse as this is a key position of responsibility. Give thought to how successful a trainer is, where they are based (is this close to you?), where they usually run their horses and how often they are happy to have you visit the stables. Also check on the level of communication they provide and make sure you are satisfied with this.
What do I expect?
If your answer is an exciting new hobby, a new group of friends, something to tell your current friends about and a relationship with a beautiful animal, then you are probably ready to become an owner!
Building your team
An important part of enjoying racehorse ownership is getting good advice and aligning yourself to people who can help you achieve your goals and ambitions. That goal could be as simple as enjoying a day out while watching your horse run or as complex as investing in a number of female horses which you might like to breed from at a later date.
Part of the pathway to getting this advice is understanding the role of different industry professionals. Here are some of the people who can assist you on your ownership journey:read more
These people are expert consultants who are available to hire. They will specialise in selecting yearlings to buy at sales, purchasing a racehorse that has already competed and assist in managing your horse’s career. An agent will also be able to assist with all paperwork involved in becoming an owner.
Recruiting an agent may be a good move if you have a group of potential owners who are keen to invest and you need assistance selecting your horse. If you are an individual contemplating investing significantly in the industry, an agent will also help develop a business plan and strategy for making your investment work.
You should look for an agent who is a member of the Federation of Bloodstock Agents. Agents are often paid a commission on what they buy, though can be engaged and paid for their time as well.
The primary role of a trainer is to prepare their horses and select the races they have best chance of winning. For most trainers this is a way of life, as well as a job.
Most begin their working day at 3am and may not finish till late afternoon. And with race meetings held seven days a week, there is little opportunity for time off.
Once a horse has been assigned to a trainer he or she will supervise all aspects of that animal’s care. The trainer will decide when it is ready to enter their stables (in consultation with the person who breaks it in). They will then carefully monitor its progression and enter it in races when the time is right.
It is also the trainers’ role to ensure your horse receives the best veterinary care, select the best races for your horse, book the jockey and look after all the logistics of race day. They, or a member of their team, should also be able to assist you with any paperwork involved in becoming an owner.
Another key role for any trainer is client relations: this means looking after you, the owner. Most trainers will provide regular updates to a horse’s owners when it is in their stable. Typically this may be done through email or audio message which can be easily sent to all of those involved in a horse.
Some trainers communicate more regularly than others and, as our survey of racehorse owners found, the level of communication received from a trainer can be a frustration for some owners. Before selecting who will train your horse it is worth clarifying how often you’ll be kept in touch on your horse’s progress and deciding whether this level of contact is right for you.
It is worth considering that most trainers won’t be able to call you each week and give you an update on your horse. These people are often running sizeable businesses and, with many horses being owned in partnerships of up to 20 individuals, it would be impossible for trainers to contact each part owner personally.
Nearly all trainers will attend the yearling sales as they look to find the next champion to bring them success, which means they can be approached to buy you a horse on your behalf. Most will also purchase horses ‘on spec’ (without an owner lined up) which they then hope to sell to their client base, often in small shares. Because of this, trainers are a great place to start if you are seeking to buy a share or even want somebody to select a horse on your behalf.
Finally, it is also the trainer’s responsibility to advise you when it may be time to sell your horse or retire it.
A syndicator’s primary role is to ensure their clients have an enjoyable ownership experience. This means selecting the best horses they can, dealing with all the paperwork so that the process of ownership is easy, managing a horse’s career, ensuring you are given regular updates on your animal’s progression and are well looked after when you go to the races.
Syndicators will usually buy horses as yearlings and then divide them up into shares; typically of 5 or 10 per cent. As with any business, they need to generate an income and syndicators will often charge some or all of the following: a management or administration fee, a percentage of prizemoney winnings or retain a share of the horse when it is sold.
When considering investing with a syndicator ensure they are have an Australian Financial Services License or are an “approved promoter” (which means they use somebody else’s licence). They are then bound by the rules of the Australian Securities and Investment Commission (ASIC), which include providing a product disclosure statement which will include details of the horse, where it was bought and for how much, an outline of fees, information on how decisions regarding the horse will be made and details of what your ongoing costs will be.
It is worth considering that a syndicator’s business model carries a significant amount of risk: another of ASIC’s rules is that, if a syndicator doesn’t sell all the available shares in a horse they are obliged to take up options themselves.
When entering into a syndicate you are entering into a business relationship so don’t feel embarrassed to ask what you can expect for your money. In horseracing there can be no guarantees about a horse’s ability, but a syndicator should be able to tell you how often you will be updated on your horse, if and when you can visit it while in training and what your benefits will be on raceday.
Buying a horse
In Australia, the majority of race horses are purchased as yearlings, when horses are around 14 to 22 months old. Public auctions provide the opportunity for racehorse owners and trainers to buy what they hope will become future champions. Australian thoroughbreds are also sold at weanling sales, breeze up sales (2YO’s who are ready to race), mixed, broodmare and dispersal sales, or by private sale. There are two auction companies in Australia who organise and run Australia’s major sales. Catalogues provide a preview of lots, detailing the pedigrees of the horses being sold and conditions of sale, and can be obtained by contacting the sales companies direct.read more
For more than a century William Inglis has been selling horses at its Newmarket saleyards just up the hill from Randwick racecourse. The Newmarket complex hosts the Easter and Classic Sales, while Oaklands, the Inglis Victorian base, stages the Premier and Autumn Yearling Sales, with both conducting a number of other yearling and mixed sale throughout the year. Inglis is to move to a new site at Warwick Farm racecourse with sales to commence at the new premises in 2019. Further information on Inglis can be obtained from their website.
Magic Millions hold a proud tradition of having sold nine of the last twelve winners of the world’s richest race for two-year-olds, the $3.5 million Group 1 Golden Slipper sold at auction as yearlings. Over 25 sales are held annually by Magic Millions, with sales conducted at the Gold Coast, Adelaide, Perth and Launceston. The flagship yearling sale held at the Gold Coast in January attracts both national and international buyers for the fun and excitement of the Carnival and the serious business of selecting a champion racehorse. Complementing the Magic Millions Yearling Sale Series, the Magic Millions Race Series offers $11.29 million in prizemoney annually – the world’s richest sales based incentive race series for graduates of Magic Millions yearling sales.
Both Magic Millions and Inglis operate a Buyer Incentive Program to support the attendance of domestic and international buyers at their sales. These programs are designed to reward buyers who attend and buy at the sales based on the region travelled from, level of spend and settlement of purchases. To discuss your eligibility to participate in the Inglis or Magic Millions Buyer Incentive Program, please contact the sales companies directly.
Anyone can attend a sale, and it’s recommended that you inspect the horse you are interested in purchasing before doing so ensure it is a conformationally sound and athletic proposition for racing.
Buying a horse can be a daunting proposition, but it is one that can be made with expert help. Bloodstock agents are an integral, regulated part of the industry and are available to assist either at a sale or in purchasing a horse privately. While there can be no guarantees in selecting and buying a horse, registered bloodstock agents know what they’re looking at and know the procedures.
Should you wish to bid on a horse at auction, you must first complete a buyer registration form supplied by the auction company. If using the assistance of a trainer or bloodstock agent, they will be able to perform the bidding for you.
Purchasing a horse can be a significant investment, and similar to purchasing a house and having a building inspection performed, there are certain checks and balances in place to protect the purchaser.
Available at any yearling sale, and by request prior to a private purchase, are a number of tests that can be performed to ensure your purchase is sound and in good health:
Veterinary Inspection: It is recommended a veterinary inspection be carried out on any horse prior to purchase. This is called a pre-purchase exam where the vet will look over the horse thoroughly for any issues, as well as assess the risk of any conformational defects.
Part of the veterinary inspection may include reviewing x-rays of the horse’s bone structure.
X-Rays: At an auction, the sale companies have established a Repository where those selling a horse may deposit X-rays for inspection by prospective purchaser’s registered veterinarians. A minimum of 36 X-ray films are provided per horse, strictly in accordance with the terms and conditions of the sale, and include varied views of vital structures such as the hooves, knees, fetlocks, hocks and stifles.
Scoping: Any horse purchased at a sale is also eligible for a post sale scope, completed by a veterinarian at the sale complex within 24 hours of the time of sale. The process consists of viewing the upper respiratory system via a long tube with a camera on the end that is inserted via the horse’s nostril. Should the approved vet be of the opinion that the horse has a condition detrimental to the horses breathing ability, resulting in exercise intolerance, and these conditions have not previously been disclosed by the vendor, the purchaser may cancel the sale.
Blood Test: The administration of anabolic androgenic steroids to any horse, excluding broodmares, is banned in Australia and this may be tested for post sale. Administration would enhance the physical appearance of the horse at the time of sale and therefore mislead the purchaser. Blood is collected for testing post purchase and the return of a positive sample will automatically cancel the sale and purchase.
2016/17 Australian Sale Dates
|* Dates subject to change|
|Ready2Race Sale||4 October||Inglis||Newmarket, NSW|
|Gold Coast 2YOs In Training Sale||11-12 October||Magic Millions||Gold Coast, QLD|
|Gold Coast Yearling Sale||11-17 January||Magic Millions||Gold Coast, QLD|
|Classic Yearling Sale||11-13 February||Inglis||Newmarket, NSW|
|Tasmanian Yearling Sale||16 February||Magic Millions||Lauceston, TAS|
|Perth Yearling Sale||20-21 February||Magic Millions||Perth, WA|
|Premier Yearling Sale||26-28 February||Inglis||Oaklands, VIC|
|Premier Yearling Sale||1 March||Inglis||Oaklands, VIC|
|Adelaide Yearling Sale||13-15 March||Magic Millions||Adelaide, SA|
|Gold Coast March Yearling Sale||20-21 March||Magic Millions||Gold Coast, QLD|
|Australian Easter Yearling Sale||4-6 April||Inglis||Newmarket, NSW|
|VOBIS Gold Yearling Sale||23 April||Inglis||Oaklands, VIC|
|Red Centre Yearling Sale||28 April||Inglis||Alice Springs, NT|
|Australian Broodmare & Weanling Sale||20 April||Inglis||Newmarket,NSW|
|Australian Broodmare & Weanling Sale||1-3 May||Inglis||Newmarket, NSW|
|Classic Yearling Sale - Book 2||5 May||Inglis||Newmarket, NSW|
|HTBA Scone Yearling Sale||14 May||Inglish||White Park, Scone, NSW|
|National Weanling Sale||28-30 May||Magic Millions||Gold Coast, QLD|
|National Broodmare Sale||31 May||Magic Millions||Gold Coast, QLD|
|National Broodmare Sale||1-4 June||Magic Millions||Gold Coast, QLD|
|National Yearling Sale||6-8 June||Magic Millions||Gold Coast, QLD|
|National Racehorse Sale||9 June||Magic Millions||Gold Coast, QLD|
|Great Southern Sale||18-20 June||Inglis||Oaklands, VIC|
|Perth Winter Yearling & Thoroughbred Sale||23-25 June||Magic Millions||Perth, WA|
|Hunter Valley Stallion Parades||TBC||Hunter Valley Studs|
|Victorian Stallion Parades||TBC||Victorian Studs|
|SEPTEMBER 1 - Official Start of Thoroughbred Breeding Season|
|Ready2Race Sale||3 October||Inglis||Newmarket, NSW|
|Gold Coast 2YO In Training Sale||10-11 October||Magic Millions||Gold Coast, QLD|
Racehorse ownership and the tax system
If you become a racehorse owner it is almost certain your horse interests will be classed as a hobby by the Australian Tax Office (ATO).read more
This means that receipts or expenses relating to your racing activities will not be assessable or deductible for tax purposes.
The exception, which can be potentially very costly, is in regard to Capital Gains Tax (CGT).
Because a racehorse (or share in a horse) is viewed by the ATO as a ‘personal use asset’, the tax ruling states that if you paid more than $10,000 for your share then you are liable for CGT if there is any gain on the sale of this horse. This $10,000 limit only includes the purchase price and not costs related to training and maintenance.
The main circumstances where your horse interests may be considered a business is if you engage in breeding, training and/or trading. In these circumstances it is worth getting advice from an advisor with experience in this area.
Imagine you are lucky enough to buy a share in a 10 per cent share in a horse for $18,000 which goes on to win the Golden Slipper. Your share in the prizemoney from that race would be worth almost $200,000, all of which is not taxable.
But then you receive an offer from a stud farm wanting to buy your colt for $20 million. If you decide to sell, your $2 million share is liable for CGT (estimated to be $450,000). With careful planning this tax situation may have been avoidable. For example, a couple could have split the share taking 5% each ($9,000 per person) bringing them under the $10,000 threshold.
Naming, registration & colours
Naming Your Horse
You’ve taken the plunge and bought the horse, now for the fun part – choosing a name. You will want a name that befits a champion, one that will be memorable, strong, maybe even clever or catchy. But there are rules.
Vulgar or obscene names, no matter how well-disguised, are banned, as are brand and company names, along with names that might vilify.
Names are also restricted to 18 characters long.
While most names tend to be inspired by a horse’s breeding, you can usually do better than adding “Miss” or a “Lad” to the name of a sire or dam.
Better to take it a bit further, like Octagonal, who is out of Eight Carat, or the Melbourne Cup winner Brew whose mother was the champion NZ mare Horlicks who in turn was out of Malt. Or Earthquake who is out of the mare Cataclysm and stakes winner Foreteller, out of Prophecy.
A lot of thought went into the naming of Caulfield Cup winner Elvstroem who is by Danehill out of Circles Of Gold who was out of Olympic Aim. Owner Frank Tagg wanted something to reflect both sire and dam so he asked the Danish ambassador who was his country’s most famous Olympian. He was told it was sailor Paul Elvstrom, a four-time gold medallist.
There is also a popular theory that champions have seven-letter names: Carbine, Phar Lap, Tulloch, Galilee, Gunsynd, Century, Hyperno, Dulcify, Saintly, Sunline, Marscay, and Dunaden are some that come to mind.
A reminder though, if you have purchased a share in a syndicated horse, the other owners will be involved in the naming process. Trainers and syndicators will usually ask all shareholders to submit a potential name and you may be asked to vote on your favourite or it may be drawn out of a hat.
Registering Your Horse
Once you have decided on a name, it is time to officially register your horse with the Registrar of Racehorses. Until this process is complete, your horse cannot race.
To register your horse, you will require the Foal Identification Card which is essentially the equivalent to a human passport. All thoroughbred foals registered with the Australian Stud Book are issued with an ID card at the time they are branded and micro-chipped.
If you have purchased your horse from a sale, the sales company will be able to provide you with the car. If you have purchased your horse privately, you will need to speak to the breeder or the previous owner.
Once you have the card, you will need to complete a Registration Form and lodge your application with the Registrar of Racehorses, a division of Racing Australia. The Registration Form requires information regarding the horse’s breeding, age and the details of all beneficial owners in the horse.
The ownership information provided at this stage is what is reproduced in the race-book. So if you want your name to appear – make sure you are listed on the registration forms! Each horse can have up to 50 individual registered owners.
If you have purchased a share in a syndicated horse, the registration process is usually taken care of by the syndicator or trainer.
In the case that you buy a horse that is already named and registered, you will have to complete a Transfer Of Ownership form, rather than a Registration form.
Details for the Registrar of Racehorses:
Level 6, 51 Druitt Street
Sydney NSW 2000
You have the horse, it has been named and registered – you are now only one step away from being ready to race.
Racing colours, commonly known as silks, are worn by the jockey during barrier trials and on race day to help identify your horse from those it is running against.
They are comprised of a jacket and a cap. The designing of a set of colours involves three distinct sections – the body of the jacket, the sleeves and the cap. Different colours and markings can be used for each of these sections.
Depending on your preference, you can design and register a set of your own colours or you can opt to race using your trainer’s colours. Syndicators often have their own set of silks which their horses race in – this is the fairest option when multiple owners are involved.
If designing your own, you must submit it to the relevant PRA for approval. Bear in mind that there are some restrictions. Block colours are rarely available and no two sets of registered silks are the same. For more information click here.
Racing colours can become iconic symbols in their own right. Think back to champions like Lonhro and Octagonal who raced in the Ingham Family’s famous cerise silks or the bright blue with the white ‘M’ currently being worn by all-conquering mare, Winx.
Combined with some racetrack success, a well-designed set of colours has the ability to become part of Australia’s racing history, so get creative and have a little fun.