The Assistant Treasurer and Minister for Financial Services and Superannuation, the Hon. Bill Shorten, recently met with the Joint Accounting Bodies, representatives from the financial planning and tax industry, Treasury, the Tax Practitioners Board (the Board) and the Australian Securities and Investments Commission (ASIC).
At the meeting, all parties agreed to a broad set of principles that will be used to develop the regulatory framework for financial planners who provide tax advice within the context of providing financial advice.
The principles include:
- The current exemption of financial planners from the tax agent services regime will be extended to 30 June 2012 to allow for the regulatory model to be developed and legislation to commence on 1 July 2012.
- Financial planners and consumers will interact with ASIC as far as practicable. ASIC and the Board will also work closely, with the Board dealing with tax-specific complaints or complex matters referred by ASIC and investigations.
- Financial planners will register through ASIC with the Board to provide tax advice within the context of providing financial advice.
The scope of services a financial planner will be able to provide will be determined by the type of registration they hold, therefore:
- a financial planner can provide general factual tax information (not tax advice)
- if they hold an additional form of registration, a financial planner can provide tax advice within the context of providing financial advice. The scope of advice will depend on the competencies that are required
- tax agents registered under the Tax Agents Services Act 2009 can provide full tax agent services, including preparing or lodging returns or representing a taxpayer in their dealings with the Commissioner of Taxation.
A transitional framework will operate from 1 July 2012 where financial planners will be eligible for a simple initial registration for a period of three years. This period will allow financial planners the appropriate time in which to attain the competencies to continue to deliver tax advice as part of financial planning advice.
The details of the model will be progressed by Treasury, in consultation with the Board and ASIC and then determined by the Australian Government. Draft legislation is expected to be released later in the year for consultation.
The Future of Financial Advice reforms will be taken into consideration when developing the model.
For further information read Future regulation of financial planners providing tax advice.