Can I pay capital gains from LAQC without accruing tax liabilities?

Mike asks:
(updated on Friday, October 27th 2006)

My partner and I have an LAQC which owns 3 rental properties, which are operating on a cash flow positive basis but incur losses due to depreciation. Last year we sold a fourth property which was held in the LAQC as we received "an offer we couldn't refuse". As a result of a significant capital gain there is a high level of retained profits in the company. While capital gains are supposedly tax free, to pay them to the shareholders would require declaration of a shareholder's salary, which would bring in to play personal income tax, ACC levies etc. Is there any way the company can pay those retained profits to the shareholders without accruing tax liabilities. My limited knowledge from readings to date suggest the only time this can be done is to either sell all the shares of/ or liquidate the company. Your advice would be much appreciated