If you have a company that used to be an LAQC before the rule change on 1 April 2011 and you have not previously taken any action in terms of transitioning the company into the new Look Through Company (LTC) regime, you still have one last chance to do so – but time is running out.
You have until 30 September 2012 to make an election for an existing LAQC / QC to become an LTC without any tax consequences and retrospectively from 1 April 2012. Following 30 September 2012 it will be possible for any existing company to enter the LTC regime but it will only be able to be done prospectively and there are potential tax implications.
Where this is most relevant is if you have a company that is going to be producing tax losses long term. If nothing is done the QC status will lock up the tax losses and they will not be able to be offset against shareholders' personal income. On the other hand if a decision is made to transition the company into the LTC regime tax losses moving forward will be able to be released to shareholders.
In summary, if you have a company that was previously an LAQC and you are concerned that you have missed the boat to transition to LTC status you have not yet, but time is running out. Contact us at GRA to discuss, but make sure you do so now as following 30 September 2012 your options will be much more limited.