Look Through Companies (LTC)
An LTC is an incorporated company with special tax status. This tax status allows tax losses to be passed through to shareholders in portion to their shareholding percentage. While similar to the popular Loss Attributing Qualifying Company (LAQC) regime, there are a couple of complex differences (owners basis calculations and loss limitations).
While traditionally LAQC’s & now LTC’s have been considered entities that are used specifically for property investors, the key purpose for setting up such an entity relates to debt restructuring. They are also some potential advantages around shareholding percentages.
If a rental investment portfolio was generated taxable income, we would not recommend the use of a LTC.