The heartache and the thousand natural shocks
Is your registration for the Tax (financial) advisers or Company/Partnership registration coming up for renewal?
Have you zero recollection of the TPB or your options?
Well you had better read on….
For a lot of you, your registration will be falling due.
The wheel is come full circle
Before we address registration processes, let’s first consider its purpose and whether registration is necessary.
If you’re providing tax advice as part of your financial advice to clients, you need to be registered with the Tax Practitioners Board and satisfy their requirements for registration (including ongoing CPD). Many advisers registered because they recognised the difficulty of advising on superannuation, investments or insurance without providing advice on tax consequences. So registration was seen to be the most efficient response to these challenges.
There are, however, alternatives. For example if the tax advice is provided without fee or reward there’s no requirement for registration.
If your services are limited to general advice and factual information, there may be no need to register at all.
Likewise, being directly supervised by a registered person or using disclaimers and effective referrals may effective alternatives for businesses that neither provide, nor promote, tax advice or tax-driven recommendations.
The obligation to register is tied to your activities and the scope and scale of the advice you provide. For clarity, the TPB have stated that a tax (financial) advice service consists of five key elements:
- a tax agent service (excluding representations to the Commissioner of Taxation)
- services provided by an AFSL or by a representative of an AFSL
- services provided in the course of advice usually given by licensee or financial adviser
- advice about liabilities, obligations or entitlements that arise, or could arise, under a taxation law
- advice that clients can reasonably be expected to rely on for tax purposes.
This definition seems expansive and inescapable but it really needs to be approached practically by focusing on the specifics of your processes.
For example, when you provide personal advice to your clients, including scaled advice and intra-fund advice, do you…
- provide tax advice, or advice on tax consequences, as part of your advice to clients for a fee or reward?
- apply or interpret taxation laws to a client’s personal circumstances?
- infer or imply that your client can rely on the advice for tax purposes?
- advise about liabilities, obligations or entitlements that arise, or could arise, under taxation law
- advise on tax deductibility of interest costs?
- advise on how to minimise capital gains or tax liabilities?
- discuss the deductibility of premiums, taxes on benefits and other taxation considerations?
If the answer to any of these questions is yes, then you probably need to be registered with the Tax Practitioners Board.
The slings and arrows of outrageous regulation
You might recall your charge to the 30 June 2017 finish, where you had to organise your registration with the TPB to enable you to provide tax (financial) advice services for a fee or other reward.
If you were lucky enough to make it to the registration finishing line, you would have let out a sigh of relief, as you would have another three years until you had to worry about it again. My how time flies when you are having fun. Most advisers who registered by 30 June will imminently be falling due.
Let us unpack in detail what you will need to do to re-register if you are a:
- Transitional tax (financial) adviser
- Standard tax (financial) adviser
In all three scenarios you must renew registration at least 30 days before it expires.
Taking arms against a sea of registration
(1) Transitional tax (financial) advisers
These advisers must meet the all the requirements shown in the table.
(2) Standard tax (financial) adviser must meet the following requirements:
All the details included above at (1), with the exception of providing a statement of relevant experience.
(3) Companies and partnerships must meet the following requirements
To register, perchance to advise
You may feel exhausted at the end of reading this article, and seriously be asking yourself TPB or not TPB.
If you need assistance working your way through this soliloquy, or if you feel compelled to point out that we’ve confused Act 5, Scene 1 with Act 3, Scene 1, please give us a call.