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Partnership and Look Through Company (LTC) Form and Guide – IR 7

Every partnership or look-through company (LTC) must complete an IR7 return showing their total income after expenses and attach either the Partnership income/loss attribution (IR 7P) or the LTC income/loss attribution form (IR 7L).

The partnership or LTC is not assessed for tax, but each partner or owner is liable for tax on their share of income from the partnership or LTC.

Each partner or owner must complete an individual tax return showing all income, including their share from the partnership or LTC.

Generally, the due date of the individual’s income tax return is 7 July after the lapse of the financial year but may be extended to 31 March of the subsequent year if the partnership or LTC has an extension of time, for instance linked with a tax agent. Where the taxpayer is in a tax payable position but did not file the return and pay tax on time, IRD may impose interest and penalties.

IRD Voluntary Disclosure Helo

Broadly, partnerships and LTCs are transparent investment vehicle for income tax purposes. This means income and expenses are flowed through to the beneficial owners every year.

There are special income tax rules for partnership and LTC. A typical example is the loss limitation rule for limited partners in a limited partnership and LTCs in partnership or joint venture. A limited partner will be entitled to a tax loss deduction for their share of partnership losses up to the value of their “basis”. Any losses exceeding the amount of the basis may be carried forward to future income years. A deduction may be allowed in future income years subject to the general loss limitation rule.

The purpose of the rule is to ensure tax losses claimed by beneficial owners reflect the level of their economic loss.

You can find more about income tax returns here.

IR7

IR7

IR7 guide

IR7 Guide

Please note the guide(s)/form(s) were the latest version at the time this web page was finalised. If you need the latest form/guide, please visit IRD’s website at here.

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