Super funds want different treatment on tax advice
The Federal Government has been asked to clarify whether superannuation funds will have to be registered to provide taxation advice or related financial product advice under amendments to the Tax Agent Services Act currently being developed by Treasury.
In a submission to the Treasury dealing with the proposed legislative amendments, the Association of Superannuation Funds of Australia (ASFA) has pointed out the degree to which superannuation funds are already providing tax-related and financial product advice, and the manner in which the cost is being amortised across fund memberships.
It is arguing that clarity is needed with respect to whether registration is required "where access to financial advice is a benefit of fund membership and is not separately charged for".
The ASFA submission says the new legislative framework operates by requiring entities that provide tax agent services for fee or other rewards to be registered if they are to avoid the potential civil penalties, with tax agent services being defined as including tax advice (financial product) services.
"Within the superannuation industry it is reasonably common for funds to provide financial advice (including subject matter that will be covered by tax advice (financial product) services) to fund members without charge," the submission said.
"Effectively the provision of the advice is a benefit of membership, with the cost of providing the service regarded as a general cost of fund administration. As such, the cost is recovered from
administration fees that are charged to all members, whether or not they avail themselves of the service," it said.
The submission said it was unclear whether, under such an arrangement, a trustee of a superannuation fund would be required to be registered.
It said on this basis ASFA was recommending that clarification be provided in the [legislation's] explanatory memorandum "as to the applicability of registration requirements to situations in the superannuation industry where access to financial advice is a benefit of fund membership and is not separately charged for".
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