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  • EB Consultants
  • Business & Taxation Advisors
  • Ph (09) 486-3999
  • 1 Milford Rd, Milford, Auckland
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LAQCs will disappear on 1 April 2011. What do you need to do?

If you have an LAQC, you are probably aware that the rules regarding LAQCs were changed in the last Budget. After 1 April 2011, LAQCs will no longer be able to attribute losses to shareholders. Effectively they have been abolished. Shareholders in an LAQC have the following options.

1. Become a Qualifying Company
You do not have to inform Inland Revenue or make any changes to company structure, if you chose this option. However, as losses must remain within the company, shareholders will no longer be able to write off company losses against their personal incomes.

2. Become an Look Through Company(LTC)
An LTC has the right to attribute losses to shareholders in proportion to the shareholding, but must also allocate profits in this proportion. Given that the biggest shareholders usually have the highest incomes from other sources, this ensures that tax on the profits (if any) of an LTC, are paid at the highest tax rate.

3. Become a partnership or limited partnership or a sole trader
These stuctures retain the ability to take advantage of losses in proportion to the ownership structure.

Decisions need to be made before 1 April 2010. If you would like to discuss your options and perhaps review your financial position, ring us for an appointment.

Our fee for the consultation will be $92 incl GST

 

Building Depreciation Claims for Residential Properties to Cease 

From 1 April 2011 Inland Revenue will no longer allow residential buildings to be depreciated in your tax accounts. 

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Tips & Info

KiwiSaver - exemptions from automatic enrolment rules
At times you may employ temporary or casual employees. If the employee is employed for 28 continuous days or less you don't need to enrol them in KiwiSaver.

Here's a quick refresher about who's eligible for KiwiSaver and the enrolment process.

You must automatically enrol eligible new employees who aren't already members. They must be:

•at least 18 and under 65 years old, and
•a New Zealand citizen or entitled to remain in New Zealand indefinitely.

Read more on the IRD website in their Sept Business Tax Newsletter