Typically speaking, financial advice related to superannuation is not an eligible tax deduction for your assessable income outside of your superannuation and cannot be stated on your tax return. However, financial advice fees outside of superannuation can be tax deductible.
Under section 8-1 of the income tax assessment (ITAA-1997) if it is incurred in gaining or producing your assessable income then it is eligible for a deduction. Both the ongoing adviser fee and initial fee for superannuation advice is tax-deductible outside of superannuation as it is related to producing assessable income for the super fund.
The way the tax rebate works is through the remuneration that your financial adviser receives, and this is because it differs from the amount you pay from your cash account due to RITC (RITC is a partial rebate of the GST payable to financial advisers that we pass directly onto you).
Therefore, you are not charged the entire amount that the financial adviser receives as remuneration and furthermore receive a small rebate inside of your superannuation.
Tax Deductible Super Advice: A Case Study
For example, Aunty Nerida went down to the local financial planner to obtain financial advice relating to her superannuation. Due to her restrictive cash flow outside of pocket, her financial adviser decided to set up both her ongoing and initial advice fee inside of her superannuation when opening a new superfund for her.
The advice fees were directly related to servicing her superannuation and ensuring it continues to suit her needs and risk appetite. The initial advice fee and ongoing advice fee will not be tax-deductible, however, she does receive a small rebate known as RITC.
If the fees were paid for out of her pocket and met the criteria of Section 8-1 of ITAA-1997 then it would be deductible.
To speak to a licensed, fully-qualified and experienced financial adviser who can help you get the most out of your money, contact Superannuation Advice Australia.
Are financial planning fees tax deductible in Australia? (2019, November 14). Prime Financial. https://www.primefinancial.com.au/faqs/are-financial-planning-fees-taxdeductible-
Fpa. (2014, February 3). FPA. https://fpa.com.au/news/page/34/
Income tax assessment act 1997 – Sect 8.1general deductions. (1997). Australasian Legal
Information Institute. https://www8.austlii.edu.au/cgibin/viewdoc/au/legis/cth/consol_act/itaa1997240/s8.1.html