Treasury has flagged the reintroduction of an exemption for accountants to provide basic SMSF advice, as well as allowing financial advisers to give incidental tax advice without being registered with the Tax Practitioners Board (TPB).
The moves were put forward as part of a discussion paper, “Review of the Tax Practitioners Board”, released recently by Treasury for industry feedback until 30 August.
A review of the TPB was announced in March and has, so far, included an initial round of consultation with the TPB, ATO, Australian Securities and Investments Commission (ASIC), Financial Adviser Standards and Ethics Authority (FASEA), the Inspector-General of Taxation and Taxation Ombudsman, Administrative Appeals Tribunal and Australian Small Business and Family Enterprise Ombudsman. Further consultations have also been undertaken with, and submissions received from, professional associations and industry stakeholders.
Treasury released the paper following these consultations and in a section related to tax financial advisers (TFA) noted: “Many of the submissions received as part of this review observed that the bringing of TFAs within the TPB regulatory regime has created a significant regulatory burden. In addition to the ATO and TPB, FASEA, ASIC and AFCA (Australian Financial Complaints Authority) all have roles to play.
“One submission noted that some of their members are subject to four existing codes of ethics and that will become five with FASEA’s code of ethics commencing on 1 January 2020. The recommendation in the financial services royal commission for a new disciplinary body may well add further complexity.”
Drawing on the submissions and consultations, Treasury noted it had a number of options, including no changes to the current regulatory models, or a model where ASIC and the TPB oversee TFAs but only one of the two bodies would impose sanctions for tax-related matters, and under those models TFAs would either have to opt in to the TPB regime if they provide tax advice or opt out if they did not provide tax advice.
A further option was also put forward that “would allow financial advisers that provide incidental tax advice to not have to be registered with the TPB”.
Under this option, Treasury also noted “there are reciprocal arrangements that permit tax advisers/accountants to provide incidental financial advice which in effect restores the concession that was previously available to accountants that are registered tax practitioners”.
Commenting on the options presented, it stated the position mentioned above “would bring back the accountants’ exemption and allow accountants to provide basic self-managed super fund advice and services without having to operate in the AFSL (Australian financial service licence) environment”.
In putting forwards its view, via the Treasury paper, the TPB claimed it supported any steps taken to reduce the regulatory burden on tax practitioners and was open to the options presented by Treasury.
“One option that could be considered is that if a financial adviser needs to be registered with the TPB, the licensing/registration with ASIC could serve as a substitute for meeting TPB registration requirements,” it said.
“Further, the application of a ‘de minimis’ exclusion would exclude some financial advisers who provide tax advice at the margins or simple tax advice.”