LTCs and QCs
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(11/07/2011)
What is an LTC?
Unlike the LAQC rules, shareholders of an LTC are liable for tax upon the company's profit, as well as being able to offset the company's losses against their other income. The key features of an LTC are:
The LTC retains its identity as an incorporated company, and will keep its corporate obligations and benefits under general company law, such as limited liability.
For income tax purposes, the LTC is "looked-through"
and the owners of an LTC are regarded as holding the LTC's assets directly and carrying on the activities of the LTC personally.
An LTC's income, expenses, tax credits, gains and losses are passed onto its owners, in accordance to their effective interest in the company.
Each owner of the LTC will then record any income or losses, as appropriate, in their own income tax return.
For other tax purposes (such as GST, PAYE or FBT) the LTC retains its tax obligations.*
* This information is directly from the IRD website. All pertinent trademarks and and copyright belong to IRD. EpsomTax.com does not claim any direct endorsement or sponsorship from IRD. Garreth Collard, principal of EpsomTax.com is a Registered IRD Tax Agent.
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What is an LTC?Unlike the LAQC rules, shareholders of an LTC are liable for tax upon the company's profit, as well as being able to offset the company's losses against their other income. The key features of an LTC are:The LTC retains its identity as an incorporated company, and will keep its corp... Read More »