The Self-managed Superannuation Funds Professionals’ Association of Australia (SPAA) has joined forces with other industry associations in demanding clarity on the regulatory framework for advisers offering tax services.
The Financial Planning Association (FPA) and the Association of Financial Advisers (AFA) have united behind a bid to defer the application of the Tax Agent Services Act 2009 (TASA) to financial advisers. In independent submissions to Treasury, both associations have called for a six-to-12 month extension to the proposed start date of July 1.
Financial planners providing tax advice within the context of financial advice were initially exempted from TASA, with industry bodies arguing they should be permanently excluded from an act that was not designed to regulate them.
The present deferral arrangement for financial planners is due to expire on June 30, but questions on implementation remain, with many in the industry totally unprepared for the change.
SPAA has a number of concerns regarding the proposed amendments and the consultation process that has led up to the release of the draft legislation.
“We are concerned that the requirements for financial advisers to become part of the TASA regime will result in them facing extra compliance burdens on top of their existing legal requirements, that the definition of ‘tax advice (financial product) service’ is unclear and that the proposed registration model is not appropriate for the financial advice industry,” said SPAA in its submission to Treasury.
“We suggest that the proposed start date of July 1, 2016 for full integration of financial advisers into the TASA regime need not be changed. However, the 18-month transitional period proposed to begin on July 1, 2013 could be moved back six months to January 1, 2014 to allow for further consultation on the proposed amendments.
“Such a delay would need to be accompanied by an extension of the TASA exemption applying to financial advisers for a corresponding length of time.”
SPAA also believes that the definition of “tax advice (financial product) services” needs clarification so that it covers advice that should appropriately be only provided by a registered tax (financial product) adviser.
“We believe that general tax advice relating to financial products should not fall within the definition of tax advice (financial product) services. For example, general information on the tax outcomes of holding equity investments such as general factual information about dividend imputation and capital gains tax should not be considered a tax advice (financial product) service.”
