LAQCLoss Attributing Qualifying Company
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A disappointing component of these proposed changes for many taxpayers where an LAQC structure no longer provides benefits, is that there is not a simplified and concessionary transition from LAQC to just being a standard company, without having to sign up for a complicated LTC regime.
LAQCs will not be able to attribute losses to its shareholders for income years starting on or after 1 April, 2011.
LAQCs and QCs can elect to transition into a new tax entity, a Look Through Company (LTC), or transfer to a partnership, limited partnership, or sole trader structure.
For a limited transitional period, existing LAQCs and QCs can transition or transfer without incurring any tax cost, but it is critical that the right choice is made.
For existing QCs and LAQCs, the current temptation is to convert to LTCs.
If the company is not an LAQC, the losses will be carried forward into subsequent years to be offset against income when the property eventually becomes profitable.