Changes to the Provision of Financial Product Tax Advice

Regulatory changes will apply as from 1 July, 2014 to Financial Advisers (FA) who provide Tax Advice in respect to Financial Products. What follows is an overview of the Impending changes to the Tax Agent Services Act 2009 (TAS Act).

The TAS Act was introduced on 1 March 2010 to regulate the provision of Tax Advice. Amendments to the TAS Act made on 29 June 2013 will bring Financial Advisers within the TAS Act if a FA chooses to provide Tax Advice from 1 July 2014. The amendments have resulted in the creation of a new category – Tax (Financial) Adviser (TFA).

How the TASA Act will apply to Financial Advisers

Financial Advisers are currently excluded from the TAS Act in respect to the provision of tax advice. Regulatory requirements are being implemented to bring Tax (financial) Advisers under the TAS Act to provide consistent regulation and oversight for advisers who provide tax advice. FAs that provide tax advice will be able to register from 1 July 2014 as a Tax (Financial) Adviser to provide tax advice.

Registering – From 1 July 2014 to 1 July 2017

From 1 July 2014, FAs will be able to notify the Tax Practitioners Board of their intention to register as a tax (financial) adviser.  Australian Financial Service Licensees whose authorised representatives notify the TPB after 1 November 2014 will need to provide a disclaimer when providing Tax (financial) Advice service during the transition period. This disclaimer can only be used until 31 December 2015.

From 1 January 2016 until 30 June 2017 all representatives of an AFS licensee will be able to apply to register with the TPB if they meet the transitional eligibility requirements.

Registering – From 1 July 2017

From 1 July 2017, anyone meeting the standard eligibility requirements for a Tax (Financial) Adviser will be able to apply to register. Once the regulations have been finalised, the relevant course providers will be providing accredited courses in Tax for Financial Advising.

Currently, you can undertake the TASA and the Code of Professional Conduct Unit (approved by the TPB) – an online TPB- approved course which also provides there hours of tax relevant CPD. The Code of Professional Conduct course covers the required topics as listed in the TPB information sheet TPB (I) 10/2011. Apparently the course is suitable for Tax (Financial) Advisers seeking registration under the TAS Act.

Implications for Financial Advisers
  • Consider whether your services are likely to be Tax (Financial) Advice services.
  • Consider your compliance arrangements and professional indemnity cover and whether you are adequately structured to provide Tax (Financial) Advice services.
  • If you wish to continue to provide Tax (Financial) Advice services, consider whether you should register with the TP Board and, if so, whether you should notify the TP Board during the notification phase or wait until the transitional phase is introduced.
  • Ensure at all times that you comply with all relevant legislative requirements.

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