Look Through Company Registration in New Zealand
What is Look-Through Company?An Look-through company can be explained as a qualifying company that is taxed like a partnership. OR An LTC is a look-through income tax treatment for close companies that elect to use these rules, which means that the company is "look-through" for income tax purposes.
- An LTC must be a New Zealand Resident.
- There must be five or fewer look-through owners
- Only a Natural Person, Trustee or another LTC can hold shares in an LTC. All the company's shares must be of the same class and provide the same rights and obligations to each shareholder.
- All the owners must elect for the Company to become an LTC.
- Generally an LTC's income, expenses, tax credits, gains and losses are passed on to its owners. These are allocated to owners in the same proportion of the number of shares held by its owners.
- All the profit is taxed at the owner's marginal tax rate. The owner can then choose to offset any losses against their other income, if the loss limitation rule applies.