Financial planners can be forgiven for approaching June with some trepidation given it is traditionally a busy period and holds the prospect of the Future of Financial Advice (FoFA) reforms at its conclusion.
However, the end of the financial year may also bring with it a reprieve of sorts as changes to the Tax Agents Services Act (TASA), a piece of legislation with significant ramifications for advisers and licensees, are likely to be delayed until later this year.
TASA was yesterday tabled in federal parliament with Schedule 3 of the Act: Creating a regulatory framework for tax (financial) advice services of the Tax Laws Amendment (2013 Measures No. 2) Bill 2013 of particular relevance to advisers.
If it becomes law, then anyone who advises, lodges or represents clients in relation to tax will have to comply with the TASA from July 1.
Up until now advisers have been exempt from the act.
Debating the bill
Assistant treasurer David Bradbury and opposition MP Tony Smith clashed repeatedly in the House of Representatives yesterday as the various mish-mash of amendments lumped together in the bill were debated.
It now seems likely that at least one schedule within the bill will be referred to parliamentary committee for recommendations, delaying its passage beyond June 27, the final sitting day until after the September election.
Bradbury noted that schedules 3 and 4 amend the TASA 2009 to “bring entities that provide tax agent services in the course of providing advice of a kind that is usually provided by a financial services licensee or a representative of a financial services licensee within the regulatory regime of the Tax Practitioners Board”.
While government claims this will ensure the appropriate regulation of all forms of tax advice – whether provided by a tax agent, a BAS agent or an entity in the financial services industry – it also exposes financial planners and licensees to the whims of a second regulator with little experience in this area.
Describing the proposed tax reforms as “a bit of a sleeper”, Philip Kewin (pictured right), general manager of retail life and investments at Zurich, said that while the issue had been overshadowed by the coverage given to more politically sensitive issues, it has significant ramifications for advisers.
“Now the tricky bit about this is what exactly gets caught up in the net as tax advice,” he said. “To the extent that much financial advice has a tax outcome, it seems the net has been cast wide.
“More detail is yet to be released and both the AFA and FPA have been vocal in their calls for the implementation to be delayed until this detail is provided.”