4/8/2023 0 Comments Lookthrough trust language![]() The definition of ‘look-through company’ was amended to exclude Maori Authorities and Charities from being LTC owners.The method for counting look-through counted owners where a trust is a shareholder was expanded to include all beneficiaries who have received a distribution from the trust, including amounts received from trust capital and corpus.This was to match the policy intent that LTCs are not widely held entities. The main changes to the LTC regime were to limit who could own an interest in an LTC to only individuals or trusts where certain conditions are met. The intention behind the recent amendments to the LTC regime was to strengthen the rules so that they better aligned with the original policy intent – a regime targeted to entities with a small number of owners with direct ownership interests. This is achieved through the look-through nature of a LTC for income tax purposes. ![]() The LTC regime recognises that companies are taxed differently to individuals and is intended to be concessionary by extending the tax treatment of an individual to a company that has elected to be a LTC. The effect of this legislation was to make a number of changes to the specific tax rules that apply to closely held companies, in particular the look-through company ( LTC) rules. Eight months have passed since the Taxation (Annual Rates for 2016-17, Closely Held Companies, and Remedial Matters) Act 2017 was enacted at the end of March 2017. ![]()
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