A sector specialist has confirmed SMSFs can still claim a partial rebate for the GST charged to a fund for financial advice fees despite some misunderstanding arising from ATO guidance on the matter.
“There still seems to be a lot of confusion about whether a self-managed superannuation fund can claim a reduced input tax credit on the GST component of adviser fees. This confusion stems from a recent publication by the ATO,” Heffron head of education and content Lyn Formica noted during an online briefing today.
“[The misunderstanding that] super funds can no longer claim reduced input tax credits on the GST component of all adviser fees is just false. If someone has told you they read that somewhere, it’s not correct.”
Specifically, Formica referred to an ATO announcement made late last year stating from 1 July 2024, a rebate will no longer be available for super funds and platform providers for the GST charged on financial advice fees and deducted from a member’s account.
“The ATO decided that some arrangements super fund platforms were undertaking weren’t right. Some self-managed superannuation funds have an investment platform or a wrap account and the platform itself was claiming the reduced input tax credit on behalf of the self-managed superannuation fund,” she said.
“The platform is not entitled to claim that reduced input tax credit because the platform is not the recipient of the supply. The only entity entitled to claim it is the recipient of the supply, which is the SMSF trustee itself.”
She encouraged practitioners to check if the changes implemented by the ATO have been reflected in updates in their clients’ SMSF administration software.
“There have been some administrative changes happening inside commonly used SMSF platforms as a consequence of this announcement,” she said.
“If you have a self-managed superannuation fund that doesn’t use an investment platform or wrap account, there won’t be any change to how that SMSF is charged and pays for their adviser fees. In theory, it should be business as usual if it’s a GST-registered fund. We can still claim a 75 per cent reduced input tax credit in relation to those adviser fees.
“If you have self-managed super funds that are using investment platforms, you need to check each of those platforms to see if they’ve changed their treatment. They all should have, as the ATO’s no compliance action approach ceased on 1 July 2024.
“Work out what the platform was claiming so you don’t double claim it.”
