Income from LTCs is taxed after deducting the expenses of the company. The number of shareholders of such company shall not exceed five shareholders.The company's shares can only belong to individuals or managers of a trust, or other Look-through company, to be shares of the same class and to give equal rights to all shareholders.A company which resides (tax-wise) in New Zealand this residency is determined by the location of the company itself and not its shareholders.To obtain the status of the LTC, a company must meet the following criteria: Income, expenses, tax credits, deductions, gains and losses of the company are transferred to its owners in proportion to their share in the company.In the realm of taxation, LTC is more transparent and the owner(s) of an LTC will be considered the owner(s) of the company's assets in order to calculate income tax.An LTC is a legal entity under the usual rules of management and operation of companies of limited liability.In notable contrast to the former rules regarding LAQCs, LTC shareholders have an obligation to pay taxes on the profit of the company personally, as well as being able to claim losses generated by the company against their other income for tax purposes. In fiscal terms, this creates a transparent mechanism that is identical to the New Zealand limited partnership. An LTC is unlike a typical company in that the income and expenditure of the company are expressly in the hands of the shareholders. This latest LTC legislation went into effect on 1 April 2011Ī Look-Through Company is the same as the traditional limited liability company, established in accordance with the New Zealand Companies Act of 1993 However, the laws differ regarding the taxation of the company's income. The draft law was published yet on 15 October 2010, and successfully passed one and a half months later. These were to be called Look-Through Companies. In December 2010, new legislation was introduced which approved a new type of companies-or rather, a new kind of taxation structure for companies in the vein of the old LAQCs. Community Investors anxiously awaited the appearance of any alternative. LAQCs had been popular among property investors. In May 2010, as part of the 2010 New Zealand budget, Loss Attributing Qualifying Companies (LAQCs) were abolished. 3 Comparison with LAQCs and Limited Partnerships.

Lookthrough rate