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Although LAQCs will be taxed similar to Limited Partnerships following the Budget announcement, this change will not remove the QCs/LAQCs regime.
If you currently derive losses from an LAQC, the Budget changes may impact your ability to access those losses in future. People with highly geared LAQCs (i.e. property speculators wanting a quick capital gain) will be mainly affected by these changes. Losses are limited to the value of the shareholder investment.
In addition, the removal of depreciation from buildings from 2011/12 income year will remove many of the tax advantages perceived for commercial property.
Shareholders of an LAQC will need to work through with their professional advisor what impact the Budget changes will have on their investments. Profits must be passed through to shareholders and taxed at marginal rates.
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