Look Through Companies
Look through companies replaced LAQC’s (Loss Attributing Qualifying Companies) on 1 April 2011.
Their operation is similar to LAQC’s in the sense that the losses are attributed to the shareholders in line with their shareholding.
They vary from LAQC’s in that profits are also attributed to shareholders. The reason both profits and losses are attributed to shareholders is that the underlying assets and liabilities are, for tax purposes, treated as being owned by the shareholders as a partnership.
From a trading point of view the look through company is treated as a normal company with limited liability.
Shareholders can be paid a PAYE salary if they work for the company.
Look through companies may still be an appropriate entity for rental properties where they are negatively geared, particularly where there is proportional ownership of the property such as two families involved, but each case must be reviewed on it’s own merits.
The information supplied here is simplified and condensed. It is only a guide and should not be relied upon as a substitute for professional advice.