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Te whakakore i te tūnga kamupene hanganga taunaha tāpui Revoking look-through company status

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Automatic loss of LTC status

A company that has elected to be a look-through company (LTC) must continue to meet all the eligibility criteria.

If it does not, the company’s LTC status is automatically revoked. This is backdated to be effective from the first day of the income year that it stopped meeting the criteria. The company’s tax return for that year will need to be completed as an ordinary company unable to pass losses on to shareholders.

When this happens the company or its tax agent should write to us stating what caused the revocation and when.

Automatic revocations cannot be reversed. Company shareholders cannot re-elect to use the LTC rules for the:

  • income year in which LTC status was revoked
  • two following income years.

Voluntary loss of LTC status

Any LTC owner can revoke the election of the company so that it loses its LTC status.

The owner must file an election form to revoke status. The revocation will take effect at the start of an income year chosen by the owner, but it cannot be backdated.

A company can ask us to reverse a voluntary revocation so it can remain an LTC. This must be requested before the revocation takes effect. The request must be made in writing by either the:

  • owner who made the original revocation request
  • owner(s) who have acquired all the look-through interests of the owner who made the original revocation request.

A company that has previously been an LTC cannot become a look-through company again for the:

  • year LTC status was lost in
  • two following income years.

To find out more about the loss of LTC status check out our guide.