Accountants urge greater deductibility of advice fees
Few consumers and probably some financial advisers appropriately understand the rules around the tax deductibility of financial advice, according to Chartered Accountants Australia and New Zealand.
The major accounting body has used its pre-Budget submission to call on the Government to consider the uniform deductibility of financial advice fees.
In doing so, the submission said such a move would encourage people to look for financial advice stating specifically that this would "encourage those who have yet to develop a self-reliant strategy for their future".
The Chartered Accountants' submission said that the current guidance provided by the Australian Taxation Office (ATO) with respect to the deductibility of advice fees sought to distinguish between the cost of ongoing advice (deductible) and upfront, typically fee-for-service advice involving the development of a financial (non-deductible).
However it suggested that this was then complicated by other scenarios where a taxpayer had existing investments and sought the assistance of an investment adviser.
"Few consumers (and we suspect some advisers) understand the distinctions drawn by the ATO," the Chartered Accountants' submission said.
It said that in light of the range of reforms impacting the advice industry and with advisers coming under the auspices of the Tax Practitioners Board it was an opportune time to reconsider the ruling.
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