Taxation (Tax Administration and Remedial Matters) Act 2011: Qualifying companies transitioning to look-through company rules

Qualifying companies transitioning to look-through company rules

Section HZ 4C of the Income Tax Act 2007

The legislation introduces an amendment to the transitional rules for a qualifying company (QC) or a loss-attributing qualifying company (LAQC) which is transitioning to become a look-through company (LTC).

Background

When the new LTC rules were introduced, transitional rules were included to provide a smooth transition for existing QCs and LAQCs wanting to become LTCs.

Key features

Section HZ 4C has been amended to clarify that when a QC or LAQC uses the transitional rules and becomes an LTC, any elections and valuation methods it previously adopted (for example, depreciable property or livestock valuation elections) will carry over to the LTC. The LTC does not have to re-establish these elections.

Application date

The amendment applies from 1 April 2011, when the LTC rules came into effect.

Date published: 05 Dec 2011

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