Allowing people to claim a tax deduction on financial advice will ensure better retirement outcomes and keep advice accessible and affordable, according to the Institute of Public Accountants (IPA). The Institute believes there is a strong case to support the tax deductibility for the costs associated with financial planning advice.

“We understand the tight fiscal environment so a capped limit on deductions would be a positive step forward for more Australians to access financial advice,” said IPA chief executive officer, Andrew Conway. Currently, a fee for service arrangement for the preparation of an initial financial plan is not tax deductible as it is not considered to be an expense incurred in producing assessable income. Mr Conway said the costs of a capped tax deductibility limit for financial planning advice would be significantly outweighed by the longer term benefits of assistance provided to taxpayers as they plan for independent retirement.

Source: IPA media release, 9 February 2014

[LTN 27, 11/2/14]