HOW DO YOU MAKE A COMPANY INTO A LTC?

How do you make a company into a LTC (Look-Through Company)? It’s a genuinely straightforward process once the company itself exists. This guide walks through the actual election specifically. If you’re starting from scratch and need the full journey — from forming the company through to ongoing compliance — see our complete guide to how to set up an LTC instead.

30-Second Read

• Once your company is incorporated, converting it to an LTC means completing and filing IRD’s Look-Through Company election form (IR862)(opens in new tab).
• Everyone who owns a look-through interest in the company must sign the form for it to be valid. That’s not just the majority shareholder.
• An LTC can have a maximum of 5 owners.
• If your company was previously an LTC and stopped being one, it can’t re-elect LTC status until two full income years have passed.
• The form can be filed electronically through myIR, or posted directly to IRD.

Step 1: Incorporate the Company First

The election only applies once the company itself exists. This is a separate step from making it an LTC. If you haven’t incorporated yet, we can help with that directly before moving on to the LTC election itself.

Step 2: Complete the IR862 Election Form

Once incorporated, complete and file IRD’s Look-Through Company election form (IR862)(opens in new tab). A few specific points worth getting right:

The income year field trips people up. Accountants generally refer to the financial year as the one ending the following 31 March. So if today’s date falls before 31 March, you’re likely in the financial year ending that coming March. If it falls just after 1 April, you’ve moved into the next one. Getting this field wrong is a common, easily-avoided mistake — double-check which financial year you’re actually electing into before submitting.

Everyone with a look-through interest must sign. This includes a trustee, director, or an agent with proper authority to sign on an owner’s behalf. It’s not just whoever happens to be the majority shareholder. If an owner is under 18 or otherwise can’t legally sign, a guardian, power of attorney, or legal representative needs to sign in their place.

You’ll need, for each owner:

• Full name
• IRD number

Then sign and date the form. Once the election is filed and accepted, your company also takes on the ongoing compliance obligations that come with running an LTC. This election is the starting point, not the end of the process.

Step 3: Submit the Form

You can file the IR862 electronically through myIR, which is generally the fastest and most reliable option, or post it directly to IRD. If you’re posting, check IRD’s current mailing address for the specific form, since postal addresses do change from time to time. IRD’s own IR862 page(opens in new tab) will have the current details. Alternatively, send the completed form to us and we’ll handle submission for you.

Two Restrictions Worth Knowing About

Maximum of 5 owners. An LTC can’t have more than five owners at election time — read the form’s own instructions carefully if your company has multiple shareholders, trusts, or other entities involved.

A two-year stand-down after ceasing LTC status. If your company was previously an LTC and stopped being one, it can’t re-elect LTC status again until two full income years have passed. That applies whether it stopped by choice or because it no longer qualified. For example, a company that stopped being an LTC in the 2024 income year can’t re-elect until the 2027 income year at the earliest. This is worth checking carefully if your company has a mixed LTC history.

If You’re Buying Property Through the LTC

If the purpose of the conversion is to purchase a rental property, we’d generally also recommend completing a shareholders’ resolution documenting the purchase and its purpose. Talk to us about a sample resolution suited to your specific situation. A generic template may not reflect current requirements.

Checklist

• ✅ Confirm the company is fully incorporated before attempting the LTC election
• ✅ Double-check the financial year field on the IR862 — this is the most common mistake
• ✅ Get signatures from everyone with a look-through interest, not just the majority shareholder
• ✅ Confirm your company has five or fewer owners
• ✅ If your company was previously an LTC, check the two-year stand-down period doesn’t apply
• ✅ File through myIR where possible, or confirm IRD’s current postal address before posting

Common Questions

Does the IR862 need everyone’s signature, or just the majority shareholder’s? Everyone with a look-through interest needs to sign for the election to be valid — this includes trustees, directors, or authorised agents acting for an owner.

Can I convert a company to an LTC at any time? Generally, the election needs to be filed by the due date for the relevant income tax return, so timing matters. Talk to us if you’re unsure which income year applies to your situation.

What if my company was an LTC before and stopped being one? You’ll need to wait two full income years after ceasing LTC status before you can re-elect. This applies regardless of the reason it stopped.

Is there a limit on how many owners an LTC can have? Yes — a maximum of five.

Summary

Converting an existing company into a Look-Through Company means completing and filing IRD’s IR862 election form, with everyone holding a look-through interest signing it — not just the largest shareholder. Keep the five-owner limit and the two-year re-election stand-down in mind. Get the financial year field right, and file through myIR where you can for the fastest processing. If you’re converting specifically to buy a rental property, a proper shareholders’ resolution is worth having alongside the election itself.

Talk to EpsomTax.com About Your LTC Election

Getting the IR862 filed correctly the first time avoids delays and unnecessary back-and-forth with IRD. Contact EpsomTax.com and we can complete and file this for you, along with any shareholders’ resolution your situation needs.