The Financial Advice Association of Australia (FAAA), in consultation with Chartered Accountants Australia and New Zealand (CA ANZ), CPA Australia, and the Institute of Public Accountants (IPA), has released a guide for the financial planning and accounting communities containing practical guidance about claiming a tax deduction for financial advice fees. This follows the release of the ATO’s Tax Determination TD 2024/7 in September 2024.

FAAA CEO Sarah Abood says the FAAA is particularly pleased to provide financial advisers and accountants with a practical guide that has been ratified by the accounting associations.

“The implications of the updated ATO guidance are important for both financial advisers and accountants. We have worked together with the accounting associations so that the guidance is practical and consistent for both.

“The publication of this guide follows more than six years of advocacy from the FAAA to encourage the ATO to update its guidance. The ability for taxpayers to legitimately claim a portion of the initial advice fee for financial advice clients is new and is live now.  The guide also provides clarity regarding the claiming of ongoing fees.  

“Advisers can now support their clients to claim a legitimate tax deduction for financial advice fees with confidence.”

The guide includes the legislative background and definitions of 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.

Tony Negline, superannuation and financial services leader at CA ANZ, commented:  

“We are proud to collaborate with the FAAA, CPA Australia and IPA on this combined industry guide to help both financial advisers and the accounting community to understand the practical implications of the tax deductibility of financial advice fees, which will ultimately benefit our clients.”

Richard Webb, superannuation lead at CPA Australia, added:  

“We look forward to further explaining the changes and working with our members and the financial advice community to collaborate and embed the use of this guide.”

Tony Greco, senior tax adviser at IPA, said:  

“We hope the guide is helpful for the financial services community, in conjunction with our members acting as the client’s tax adviser, to have real clarity of the approach to apportionment and deductibility more generally.”

The guide can be found on the websites of all four associations:

FAAA: click here

CA ANZ: click here

CPA Australia: click here

IPA: click here