Appendix 1 - Statistics

Profile of QCs, LAQCs and LTCs

Table 8 shows that there were a large number of LAQCs and QCs before the 2010 Budget. The vast majority (95 percent) were LAQCs, suggesting that access to losses at the personal level was a major attraction in the formation of QCs. Most LAQCs with activity (about 80 percent) attributed losses.

However, around 20 percent of LAQCs were tax-paying. These could have been companies in cyclical industries, or they could have represented companies that had start-up losses after they were established, but had now matured and become profitable; or profitable firms that might eventually have losses to attribute.

Table 8: Number of QCs and LAQCs in 2009 tax year
QCs Number

Profit making

4,257

Loss making

1,902

Nil returns

1,457

Total

7,616
LAQCs  

Profit making

24,377

Loss making

84,624

Nil returns

27,041

Total

136,042
Total (QCs + LAQCs) 143,658
LAQC as % of total 94.7%

Since the 2010 reforms, the composition has changed significantly. Companies that were LAQCs have become either QCs or LTCs. However, Table 9 indicates that there are fewer entities overall in these categories, suggesting that some have chosen to wind up or carry out business under another form.

Many of these new LTCs are involved in real property. This tallies with earlier data on the distribution of QC/LAQC losses by industry, as shown in Table 10.

Table 9: Total numbers of LAQCs, QCs and LTCs since 2010 reforms
  Tax year
2011 2012 2013
LAQCs 133,617 1,310 0
QCs 6,282 80,346 68,844
LTCs 0 43,826 46,182

Before Budget 2010, half the companies passing through losses were in the property industry. But loss pass-throughs were widely distributed across the other industries. For most industries, around half the firms were passing through losses.

  Percent of total losses passed through Number pass through Percent of firms in industry passing losses through Average loss
Table 10: Distribution of loss pass-throughs by industry for 2011
  % Number % $
Agriculture 16 5,289 49 $61,000
Mining 0 43 43 $70,000
Manufacturing 3 1,668 46 $38,000
Utility & waste 0 62 45 $16,000
Construction 3 2,277 36 $29,000
Wholesale trade 2 1,136 47 $28,000
Retail trade 5 3,384 50 $30,000
Food/accommodation 5 2,497 65 $39,000
Transport 2 1,045 48 $33,000
Information/telecom 0 470 58 $19,000
Finance/insurance 3 1,948 62 $27,000
Property 47 41,862 83 $22,000
Professional service 3 3,237 42 $19,000
Admin service 1 506 52 $22,000
Public admin 0 27 38 $0
Education 0 281 50 $21,000
Healthcare/social 1 568 34 $46,000
Arts & recreation 1 598 62 $32,000
Other services 1 1,060 49 $20,000
Not elsewhere included 1 1,263 75 $21,000
Unknown industry 4 3,880 70 $21,000
Total 100 73,101 65 $27,000

Distributions of LTC and QC income and losses

Charts 2 and 3 show the distribution of reported income and losses for LTCs and QCs in 2013. 80 percent of LTCs fell into the loss/income range -$30,000 to +$10,000 while 80 percent of QCs fell within the -$20,000 to +$20,000 range. Given that LTCs allow loss flow-through, it is not surprising that a higher proportion of LTCs were reporting losses, although the difference is not great.

Chart 2: Distribution of combined LTC and QC income – 2013 tax year

Chart 2: Distribution of combined LTC and QC income – 2013 tax year
Larger version of image

Chart 3: Distribution of LTC and QC income – 2013 tax year

Chart 3: Distribution of LTC and QC income – 2013 tax year
Larger version of image

Deduction limitation rule

In terms of non-allowable deductions, the number of LTCs reporting non-allowable deductions carried forward as at the end of the 2013 tax year was 446 (around one percent of total LTCs). The number of look-through owners affected was 695. The average value of non-allowable deductions carried forward per owner was $16,547.

Overseas income

  Number of LTCs with foreign income Total foreign income Total FTCs Number of LTCs with foreign losses Total foreign losses
Table 11: LTCs with overseas income, foreign tax credits and losses
2012 184 $217.1m $7.2m 14 -$0.2m
2013 239 $29.8m $6.7m 21 -$1.4m
2014* 273 $36.2m $6.0m 24 -$3.9m

*almost a complete year

Overseas income Overseas losses
Table 12: Distribution of overseas income and losses
$000s Number of LTCs   $000s Number of LTCs  
2012 2013 2012 2013
0 to 10 141 162 0 to -10 10 7
10 to 20 8 16 -10 to -20   7
20 to 30 6 6 -20 to -30 1  
30 to 40 4 8 -30 to -40   1
40 to 50 1 6 -40 to -50 1  
50 to 60 3 3 -50 to -60   1
60 to 70 3 1 -60 to -70   1
70 to 80   2 -70 to -80 2 1
80 to 90 1 3 -80 to -90    
90 to 100 1 2 -90 to -100   3
100+ 16 30 -100+    
Total 184 239 Total 14 21

Distribution of LTC owners

Number of owners Number of LTCs
Table 13: Number of owners reported in 2013 LTC returns
1 14,002
2 28,556
3 2,149
4 992
5 197
6 89
7 20
8 13
9 5
10 1
11 1