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LAQC Update

Frank Chan
Frank Chan

ARTICLE by Frank Chan, Solicitor

March 2011



 Recent law changes will affect Loss-Attributing Qualifying Companies (“LAQCs”) and how they are assessed for tax as from 1 April 2011:



LAQCs will no longer be able to attribute losses to shareholders for income years starting on or after 1 April 2011, and existing LAQCs automatically become Qualifying Companies (“QCs”) (without the ability to attribute losses) at the start of the income year that begins on or after 1 April 2011.

There will not be any ‘new’ LAQC or QC elections; companies will not be able to make the election to become an LAQC or QC for an income year that starts on or after 1 April 2011. Companies can still make the election, but only for an income year that starts prior to 1 April 2011.

Companies that are already an LAQC or QC immediately preceding 1 April 2011 may choose either to:

  • remain a QC;
  • make the transition to a Look-Through Company (“LTC”);
  • make the transition to a partnership, limited partnership or sole trader;
  • or revoke its QC election.

If you have an LAQC and need to discuss your options, or if you simply wish to transfer assets away from your LAQC, please contact Frank Chan at Corban Revell. It can be done in just a few days and we will be happy to meet you to discuss your requirements and provide you with an estimate of our costs.