Industry groups hammer out guidance on tax-deductible advice fees

The Financial Advice Association Australia (FAAA), in consultation with leading accounting bodies, has released new guidance on tax-deductible advice fees.

The guidance follows the release of the ATO Tax Determination in September last year, which the FAAA had lobbied for around six years, and clarifies when individuals may be entitled to a deduction for financial advice fees.

The guide covers the legislative background and key definitions related to tax (financial) advice and taxation law. It outlines three potential methodologies for apportioning fees and provides examples, Statement of Advice text and fee summary templates, for active use.

FAAA chief executive Sarah Abood said the body is particularly pleased to provide advisers and accountants with a practical guide that's been ratified by the accounting associations.

"The implications of the updated ATO guidance are important for both financial advisers and accountants. We've worked together with the accounting associations so that the guidance is practical and consistent for both," she said.

She added that the guide clarifies the process for claiming ongoing gees, allowing advisers to support their clients claim of a legitimate tax deduction for advice fees with confidence.

Chartered Accountants Australia and New Zealand superannuation and financial services leader Tony Negline said the guide will help advisers and the accounting community to understand the practical implications of the tax deductibility of advice fees, which will "ultimately benefit our clients.

CPA Australia superannuation lead Richard Webb, meanwhile, said the association will continue to explain the changes and work with its members and the advice community to collaborate and embed the use of the guide.

Institute of Public Accountants senior tax adviser Tony Greco said he's hopeful the guide will be helpful to the financial services community with "real clarity" of the approach to apportionment and deductibility more generally.