BEST OWNERSHIP STRUCTURES FOR INVESTMENT PROPERTY

9 times out of 10 an LTC is the best structure for owning a rental property: “You have the benefit of limited liability, a legal structure that is clearly a separate entity yet under your control, and yet it is treated at tax time like a partnership: the best of both worlds.”‘

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OFFSET LTC PROFITS OR LOSSES AGAINST OTHER RENTALS

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Note that you can’t offset any losses against income from other sources e.g. wages, like you used to in the good old days. That is what the concept of “ring-fencing of losses” means. The losses are “ring-fenced” so that they only apply to residential rental property.

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WHAT IS A LOOK-THROUGH COMPANY? (LTC)

That’s a good question. What is a Look Through Company or LTC? Basically, it’s the replacement for the old LAQC (Loss Attributing Qualifying Company).  At tax time, you look through the company to the shareholders, and distribute the income (or losses) to them. How is it different from a normal company then?A “normal” limited liability company can pay dividends…

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HOW DO YOU MAKE A COMPANY INTO A LOOK-THROUGH COMPANY?

How do you make a company into a Look-Through Company or an LTC?  HOW TO It’s reasonably straight-forward. Once the company is incorporated (click here if you want us to do this for you), you then complete and send off an IR862: Section 1 is fairly self-explanatory, although you may come unstuck at the part where it asks…

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WHAT’S THE BEST WAY TO STRUCTURE OUR MORTGAGES?

You obviously want to know: What’s the best way to structure our mortgages? For 5 tips: scroll down.  But let’s assume you have Your own home, with a mortgage A rental property, with a mortgage What do you want to achieve? In order of priority: Pay off the family home Ummm, I haven’t thought much…

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