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Determination PROV20: Tax Depreciation Rates Provisional Determination Number PROV20

Equestrian Arenas: consisting of permanent construction materials - depreciation

The Commissioner has set a provisional depreciation rate for equestrian arenas consisting of permanent construction materials.

Equestrian arenas are made up of several layers. The first layer is a base course consisting of compacted and graded material such as rock, or rubble such as old bricks or roading material. This layer is permanent and does not come within the meaning of "depreciable property".

The next layer, the scalpings, is used to even out the base course. Sand and then a top course consisting of chopped rubber or similar material complete the arena.

Over a number of years the top three layers, (the scalpings, the sand and the top surface) will mingle and lose their separate properties. Eventually, it will be necessary to remove and replace these layers. This will not be the case with the base course which is likely to get better and more stable over time.

Expense item
The top surface may degrade relatively quickly as the top three layers mingle. It may be necessary to top up this top surface from time to time as ongoing repairs and maintenance.

Determination PROV20: Tax Depreciation Rates Provisional Determination Number PROV20

This determination may be cited as "Determination PROV20: Tax Depreciation Rates Provisional Determination Number PROV20".

  1. Application
  • This determination applies to taxpayers who own items of depreciable property of the kind listed in the table below.
  • This determination applies for the 2010/2011 and subsequent income years.
  1. Determination
  • Pursuant to section 91AAG of the Tax Administration Act 1994 I set in this determination the provisional rate to apply to the kind of items of depreciable property listed in the table below by:

    • Adding into the "Agriculture, horticulture and aquaculture" and "Leisure" industry categories, and the "Buildings and structures" asset category, the provisional asset class, estimated useful life, and diminishing value and straight-line depreciation rates listed below:

    • Provisional asset class Estimated useful life (years) DV rate (%) SL rate (%)
      Equestrian Arena consisting of permanent construction materials (excluding the base course) 12.5 16 10.5
  1. Interpretation
  • In this determination, unless the context otherwise requires, words and terms have the same meaning as in the Income Tax Act 2007 and the Tax Administration Act 1994.

This determination is signed on the 16th day of July 2010.


Rob Wells
LTS Manager, Technical Standards