The owners of a look-through company (LTC) are liable for income tax on the LTC's profits, while also being able to offset the LTC's losses against their other income.
Are you a business owner or property investor? Setting up a Look Through Company (LTC) allows you to transfer business profits and losses to your personal income, so you could pay less tax.
LTC for the Rental Property Investor
If you own one or more rental properties, you could save money by setting up an LTC. The LTC structure allows you to transfer profits and losses from your investment properties to your personal income. So, by off-setting any losses you make through your rental property, against the income you earn from other sources, you can reduce the rate of tax you pay, and save more money.
LTC for the Small Business Owner
If you are a small business owner trading under your own name, then setting up an LTC could allow you to access lower tax rates, whilst still giving you the benefits of limited liability.
As a small business owner, you need to be earning close to to $180,000 before your average income tax rate exceeds the company rate of 28 cents in every dollar. If you’re earning less that $180.000 a year, LTC setup could be the best option for you. But you can rest assured, we will discuss all the options with you – including limited partnerships, qualifying companies and sole trader structures – and recommend the best solution for your future growth.
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This article is just a short general answer, as businesses vary from each other, if you want to know more about how your business can do it, to decide whether the LTC option will suit you, and give you the tax advantages you seek, just contact us.