The May 2010 Budget contained some initial indications of what to expect from the changes to the QC and LAQC rules. In this short youtube video Sybrand van Schalkwyk discusses at a very high level the issues to consider and the important dates to keep in mind.
A Transcript of the video follows:
In the May Budget the government announced that loss attributing qualifying companies and qualify companies will be reviewed. Now more details have come to light of what they are planning to do. Suffice to say that everyone is asking what should I do with my LAQC. Its not possible to answer that question in this short video, but it is possible to say that if you have a LAQC you should seriously consider consulting with your advisor. Now the reason is that there is going to be a limited time frame where people can transition from their LAQC into other forms of doing business. One of those is a limited partnership. There is also a new flow through company which is being established which is an entirely new vehicle specifically being designed to deal with LAQC and QC [transitional] problems.
One thing you should know is that come April 2011 you will not be able to stream your losses through your LAQC to yourself. Therefore you need to take this into account. You are going to need to pay more tax and also pay someone some money to structure out of your current situation if that is required.
Parry Field Lawyers provide legal advice on a range of tax matters and are able to assist you with any tax questions that you might have. Please contact Ken Lord at Parry Field’s Christchurch office (348 8480) for help with tax matters. Please note that this is only a high level overview of the rules, and there may be specific situations where a different outcome is reached. Therefore, please don’t rely on this as legal advice.
