FPA slams last minute tax changes
The Financial Planning Association (FPA) has slammed last minute changes to the GST and Ralph inspired new tax system which will slug planners with thousands of dollars of compliance costs.
The Financial Planning Association (FPA) has slammed last minute changes to the GST and Ralph inspired new tax system which will slug planners with thousands of dollars of compliance costs.
FPA chief executive Michael McKenna has described a senate committee’s finding and a tax office ruling as “ridiculous” and “unwarranted”.
“What we basically have here is a circus. It is going to result in no net revenue to the tax office and a huge loss to the industry,” McKenna says.
Under the Alienation of Personal Services Income legislation, planners will be pe-nalised by the Australian Tax Office (ATO) for receiving payment from a dealer group as a proper authority holder.
The Financial Planning Association (FPA) has argued that many planners are cov-ered by this arrangement due to the current Corporations Law requirements.
McKenna says planners are in a Catch-22 situation because Corporations Law re-quires one set of practices and the proposed legislation penalises them for follow-ing that law.
He says the new legislation adds further burdens to planners who will need to seek two determinations in a six month period as a result of CLERP6 reforms.
In a further last minute change, the ATO has instructed proper authority holders that they will need an Australian Business Number (ABN) for both their business and one for each proper authority holder.
McKenna says this stipulation is unwarranted and will be eliminated by the intro-duction of the Financial Services Reform Bill (CLERP 6) on January 1, 2001.
He is also surprised at the timing of the ruling given by the tax office with the FPA not aware of the ruling until June 5, almost a week after the formal ABN deadlines.
AUTHOR
Jason Spits
Recommended for you
Digital advice tools are on the rise, but licensees will need to ensure they still meet adviser obligations or potentially risk a class action if clients lose money from a rogue algorithm.
Shaw and Partners has merged with Sydney wealth manager Kennedy Partners Wealth, while Ord Minnett has hired a private wealth adviser from Morgan Stanley.
Australian investors are more confident than their APAC peers in reaching their financial goals and are targeting annual gains of more than 10 per cent, according to Fidelity International.
Zenith Investment Partners has lost its head of portfolio solutions Steven Tang after 17 years with the firm, the latest in a series of senior exits from the research house.
