Look Though Company (LTC) - Is your company one?
With the new LTC’s there is an ‘owners basis calculation’ that is required to ensure the shareholder can claim all the expenses against the income in proportion to their shareholding. In many cases, the security offered personally by shareholders to the bank for company loans has a large impact. Because of this, when we are working on your accounts this year, we will be asking for the following:
- A copy of loan agreements with the bank in the name of the company.
- The government valuation of any trust or personally owned property.
- The approximate amount of any mortgage owed on any trust or personally owned property.
If you have not already been asked to provide this and your company is an LTC, please send it in when convenient.
Loss Attributing Qualifying Companies (LAQC) and Look Through Companies (LTC)
Losses from LAQC's are no longer able to be claimed after the 2011 tax year.. The IRD's solution to the cessation of LAQC’s is the LTC.
Click here to learn more about what is happening, the features, advantages and disavantages of a LTC, and what options are available to you.
There is a 2 year to transition period where companies can elect to transfer to another entity without any tax cost by 30 November 2012. However it is preferred for a decision to be made now or losses will not be able to be utilised in the 2012 year.
Diagram - Summary of Taxation of Profit and Losses for Different Types of Companies.
Return to Tax Changes