Financial planners providing tax advice have come under the spotlight of the Australian Securities and Investments Commission (ASIC), which released new guidance today to ensure practitioners comply with their obligations under the Corporations Act.
The latest guidance by the regulator follows the joint stance issued by ASIC in conjunction with the Australian Taxation Office (ATO) on advice guidance in December last year.
But it appears financial planners haven’t got the message 12 months on, prompting the regulator to release a series of frequently asked questions (FAQ), including rudimentary queries such as “Is an Australian Financial Services Licence required to provide tax advice?”
ASIC director regulatory policy Mark Adams said the guidance should also assist tax advisers as well as financial planners to better understand how and when some of the compliance obligations apply.
‘These FAQs, together with any guidance issued by the ATO, will help give a clearer picture of how the taxation and financial services laws apply to the provision of taxation advice,” Adams said.
Meanwhile, the regulator is also considering releasing further clarification on another tax related issue for the benefit of planners.
The draft determination in question: TD 2004/D22: ‘Income tax: does paragraph 251L(1)(b) of the Income Tax Assessment Act 1936 prevent persons other than registered tax agents from giving advice about a taxation law’ was put on the table back in June this year.
This point of law in question does not prevent a person in a non-representational capacity from giving tax advice that is part of, or incidental to, another service.
Paragraph 251L(1)(b) is concerned with regulating the giving of advice by any person who acts as a taxpayer’s representative in the taxpayer’s interactions with the ATO, and includes any situation where a taxpayer seeks advice about a taxation law to enable them to satisfy a tax obligation.
