Latest News [index] Electing to become a look-through company
The new look-through company (LTC) regime will apply from 1 April 2011. As that date approaches, directors and shareholders of existing loss attributing companies (LAQCs) need to know when the decision to become an LTC must be made.
In this our second article in our series on LTCs we consider when an existing LAQC can elect into the LTC regime.
For an existing LAQC the election must be made, and received by the IRD, within the first six months after the start of either of the next two income years. Importantly, the election cannot be made until the start of the next income year (the 2011/12 income year), when the new LTC regime comes into force.
This means that an existing LAQC with a 31 March balance date that wishes to enter the LTC regime must elect to become an LTC by either:
· 30 September 2011 to be a LTC for the 2011/12 income year; or
· 30 September 2012 to be a LTC for the 2012/13 income year.
If an existing LAQC does not elect to become a LTC for the 2011/12 income year the LAQC will be a qualifying company for the 2011/12 income year for tax purposes and will not be able to attribute losses.
If you have any questions about electing into the LTC regime or whether a LTC has a place in your asset and estate planning structure please contact a member of the Ayres Legal team.