The first step is to look at your existing cover and see whether
it extends to the provision of tax advice. If it does not, once
registered, you may continue to use your existing cover until it
needs renewing, at which point you need to put in place
arrangements that cover tax advice. This may be by restructuring
your policy or obtaining additional cover. The TPB Chair, Mr Ian
Taylor has stated that -
"for the vast majority of financial advisers, we [the
TPB] do not expect that tax (financial) advisers will need to get
additional PI insurance policies to what they might already hold to
meet ASIC's requirements. We understand that any increase in PI
insurance premiums will only relate to extending PI insurance
policies to cover tax advice if they do not already do
Exceptions to the rule – PI cover not required if:
covered by a policy held by another registered tax adviser
not receiving a fee for services;
exclusively providing in-house tax services; or
receiving an honorary reward for your services (eg. voluntary
provision of tax services to a not-for-profit entity).
1 July 2014 – 31 December 2016
Must have PI cover within 14 days of notification of
registration. Pre-existing PI cover will be adequate until the
earlier of when it comes up for renewal, or 1 January 2017, after
which PI cover must comply with TPB requirements.
1 January 2017
Must have PI cover that meets TPB requirements
ABC Financial Planning Pty Ltd (ABC) holds an AFSL and has
current PI cover for financial planning, but it does not extend to
providing a tax (financial) advice service. The cover lapses on 31
ABC notifies the TPB on 1 July 2014 and is deemed to be registered
under the transitional arrangements. As ABC's cover lapses on
31 December 2014, it must arrange for PI cover that meets the TPB
requirements by this date.
XYZ Financial Planning Pty Ltd (XYZ) is in the same situation
but its cover does not lapse until 30 June 2017. XYZ must arrange
PI cover that meets the TPB requirements by 31 December 2016.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The income tax treatment of any property lease incentive will vary, depending on the nature of the inducement provided.
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