Certainly, do not liquidate or elect out of the LTC regime, as remission income arises which flows back to the shareholders personally.

Do not do a debt capitalisation as IRD consider it tax avoidance.

If all the LTC’s debt is shareholder debt, wait for the May Tax bill to be passed. The draft bill seems to have some teething problems, which have been pointed out to Inland Revenue in technical papers, and once they are sorted out there should be a clear pathway for LTC’s to be liquidated without remission income arising.

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