Tax agents regime postponed for financial planners
The Treasury has deferred the application of the National Tax Agent Services regime to financial planners until 1 July, 2011, a move which has been applauded by financial planning industry groups but has caused concern for an accounting group.
The new tax agent services regime, which has replaced six state-based Tax Agents Boards with a single, standard national system, came into effect on 1 March this year. Yesterday Assistant Treasurer and Minister for Financial Services and Superannuation, Bill Shorten, announced new regulations that clarify how ‘in-house’ advisers and custodians are treated under the regime.
“Certain services, provided within a consolidated group, stapled entities, partnerships, and joint ventures, will now be exempt from the definition of ‘tax agent service’ and ‘BAS service’, which will reduce the regulatory burden on those types of businesses,” said Shorten.
The extension of the application of the regime to financial planners was to allow for further consultation with the industry, he added. The Treasury will release a consultation paper at the end of this month.
The Financial Planning Association (FPA) and the Association of Financial Advisers (AFA) applauded the extension. FPA chief executive Mark Rantall said the association appreciated Shorten’s prompt attention to the matter, adding that the tax regime was an additional regulatory burden on financial planners — along with the Credit Act and the Financial Services Regime — that the FPA considered to be unnecessary.
“We feel financial planners do not need additional licensing,” said Rantall. “Tax advice during the financial planning process is incidental,” he said, adding that any additional training around tax advice should fall under the Corporations Act.
AFA chief executive Richard Klipin stated that the extension demonstrated that Shorten was a strong advocate for financial services, “willing to listen to the industry’s concerns”.
The National Institute of Accountants (NIA), however, was disappointed by the delay, stating it would leave Australians receiving tax advice from their financial planner unprotected.
The NIA stated that the purpose of the new regime was to regulate all providers of tax advice, and the exclusion of financial planners defeated its intended objective and was putting consumers at risk.
“It’s irrefutable that financial planners provide tax advice and therefore it is inconsistent that they be excluded,” said NIA chief executive Andrew Conway.
Recommended for you
With an advice M&A deal taking around six months to enact, two experts have shared their tips on how buyers and sellers can avoid “deal fatigue” and prevent potential deals from collapsing.
Several financial advisers have been shortlisted in the ninth annual Women in Finance Awards 2025, to be held on 14 November.
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.
