FAAA, Accounting Bodies Release Tax Deductibility Guidance for Financial Advice Fees

The Financial Advice Association of Australia (FAAA), in collaboration with major accounting bodies including Chartered Accountants Australia and New Zealand (CA ANZ), CPA Australia, and the Institute of Public Accountants (IPA), has released a jointly endorsed guide to help financial advisers and accountants navigate the Australian Taxation Office's (ATO) updated Tax Determination TD 2024/7 regarding tax deductibility of financial advice fees. This comprehensive guide provides practical guidance, legislative context, fee apportionment methodologies, and templates to assist professionals in supporting clients to legitimately claim tax deductions for both initial and ongoing financial advice fees. The guide responds to more than six years of advocacy by the FAAA to update ATO guidance and addresses previous uncertainties that prevented many firms from fully utilizing the deductibility rules. FAAA chief executive Sarah Abood emphasized the importance of the collaboration to ensure the guidance is both practical and consistent across professions, enabling advisers to confidently assist clients in claiming deductions. The initiative marks a significant alignment between financial advice and accounting sectors, reflecting a unified approach to interpreting and applying the new tax rules.