Skip to main content

Changes to the myIR login screen are coming You will not be able to use myIR between 1pm Saturday 8 October and 8am Monday 10 October. This is so we can update our external authentication system. From Monday 10 October the myIR login page will have a new look and feel, but the login process will not change.

Cost of Living Payment Eligible customers will have the payment automatically paid into their bank accounts by the end of the day 3 October 2022. The payments will be staggered and Credit Union customers may not receive their payment until 4 October 2022. Cost-of-Living-Payment

When you sell your shares in a look-through company (LTC) you're an “exiting owner”. You're treated as disposing of your share of the look-through company's property. You have to pay any tax associated with this sale.

When you have to pay tax

Exiting owners only need to declare and pay tax on the sale of look-through company shares if the income is over certain amounts - "thresholds". These thresholds do not apply when the look-through company status is revoked or if the company is liquidated.

$50,000 threshold

You must declare and pay tax on the sale of shares if you're paid more than $50,000, minus liabilities, above the total net book value of your share of the look-through company's property. If you've sold any look-through company shares in the past 12 months these amounts will also be counted.

If your income from these sales is higher than the $50,000 threshold, the entire amount is treated as your taxable income.

If your income from look-through company share sales is less than $50,000

The entering owner (whoever buys the shares from you) is treated as getting their interests in the look-through company's underlying property for the same cost as you originally got them. 

If your income from look-through company share sales is $50,000 or more

The entering owner is treated as getting their interests in the look-through company's underlying property for the amount they paid for the shares.

What to do in specific situations

Trading stock threshold

If the look-through company's total yearly turnover is $3 million or less in the year that shares are sold, exiting owners do not have to make a revenue accounting adjustment for trading stock.

Accounting for depreciation

Exiting owners do not have to account for depreciation recovery or loss on their share of any depreciable tangible asset if the asset's total cost was $200,000 or less when the look-through company first got it.

Financial arrangements

Exiting owners do not need to perform a base price adjustment for any interest the look-through company holds in a financial arrangement if:

  • the look-through company needed to enter the arrangement as part of its business, but the arrangement is not the main part of the look-through company's business
  • you are not in the business of holding financial arrangements.

Short term sale and purchase agreements

Exiting owners do not need to declare or pay tax on look-through interests that included a short term agreement for sale and purchase - this is excluded income.

If the look-through company property includes female breeding livestock

If the livestock is valued using the national standard cost scheme or cost price method, the entering owner may be treated as if they had originally purchased and held the livestock.

How to sort out income and losses after a change in shareholding

As a look-through company owner, you're treated as holding the company's property and assets directly in proportion to your effective look-through interest. If the look-through company's shareholding changes during the year, you must work out your share of income and losses.

There are 2 methods you can use:

You can only use the actual look-through interest method if all owners agree.

If the look-through company's assessable income is $3 million or more during a 12 month period

You may need to use the accounts method if we decide it will provide the most accurate allocation of income and losses. We’ll contact you if we decide the look-through company must use this method.

To find out more about taxing a look-through company's income, check out our guide.

Last updated: 07 Jan 2021
Jump back to the top of the page