Financial advice costs – deductible or not?
The short answer is that under current tax laws, claims are allowed for expenses only if those costs are incurred in gaining or producing your assessable income.
So before submitting a claim, you want to ask yourself this question:
Is there a connection between the costs of the advice you sought and the production of your assessable income?”
Investment plan costs – are they deductible?
Your costs for creating an investment plan are not counted as deductible expenses by the ATO for three main reasons:
- The costs are incurred too early in the investment process to be directly related to gaining or producing assessable income from the investment.
- They are an expense associated with putting a possible income-earning investment in place, and so cannot be shown to have enough connection to that income (if there is any at all).
- The costs are an incidental expense and are an outlay to acquire the investment, and therefore this is an outlay that is capital in nature.
Ongoing fees – are they deductible?
Here’s some good news for you; The Tax Commissioner has declared that once the investment plan is in place, the ongoing fees or retainers made in relation that investment portfolio are typically deductible.