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Important LAQC Changes

How LAQC legislation changes affect you

From 1 April 2011 new legislation effectively removed the attribution of losses to shareholders for Loss Attributing Qualifying Companies. The Government wants to prevent companies retaining profits to obtain a lower company tax rate.

A new tax entity, called a Look Through Company (LTC) has been created who's profits or losses are passed to shareholders and deducted or taxed at their marginal tax rate.

What does this mean for me?

LTC status may create tax DISadvantages for your company.
The changes are complex so make an appointment to discuss with us the full implications as they affect your company.

Broadly what are my options?

  1. Become a Look Through Company.
  2. Remain as a Qualifying Company, unable to attribute losses to shareholders.
  3. Exit the QC regime and become a standard company.
  4. Restructure the ownership of your business/assets so they are owned by a Partnership, a Limited Partnership or a Sole Trader.

Transitional rules with tax concessions enable Advisory Accountants to transition you across to an LTC, a Partnership, a Limited Partnership or Sole Trader.

This does sound urgent. How long do I have?

We need to review your situation as soon as possible (unless you have early balance dates) even though you have until 30 September 2012 to become an LTC or other entity. We'll need to alter shareholdings in some instances and put firm tax and dividend plans in place for others.

What should I do?

Contact Accountant First and make an appointment to discuss the implications for your company immediately so we can take the most effective action for your circumstances.

More detailed information regarding LAQC changes and further implications.

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  • Wellington Office

    Level 16, Dimension Data House
    157 Lambton Quay
    Wellington, New Zealand

    PO Box 5544
    Wellington 6140

    Phone: 04 499 6824
    Fax: 04 237 6824
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  • Porirua Office

    22 Prosser Street
    Porirua, New Zealand

    PO Box 50683
    Porirua 5240

    Phone: 04 237 6825
    Fax: 04 237 6824
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