LAQC Company Structures Changing
Mar 21, 2011
The recent Legislation which comes into force on April 1 2011 means that Loss Atributing Qualifying Companies (LAQC) will have to be restructured to minimise their tax liabilites.
The new type of Company, known as the Look Through Company (LTC) is being introduced to replace the LAQC.
Whilst the LTC will allow losses to be allocated to shareholders, any profits must also be allocated out to shareholders according to their prospective shareholding.
You must make an election to become an LTC. If you do nothing, your LAQC will be automatically converted to a Qualifying Company (QC) for future years (ie. you will not be able to offset your QC loss against your taxable income to reduce your tax bill).
If you wish to use these losses in the current year, you will need to change the way you operate your business. A major area affected is the loss of depreciation on buildings. This will have a large impact on your tax.
Although structures can be changed during the next tax year, some options need to be taken before 1 April 2011 as there are special concessions only available for the next few months.
We can review your stiuation and suggest an appropriate structure for you. Call us now for an appointment.
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