The Australian Taxation Office has released a final determination on the deductibility of financial advice fees.

It says fees relating to tax financial advice are deductible under section 25-5 of the Income Tax Assessment Act 1997 if the advice is provided by a qualified tax-relevant provider.

The determination gives an example in which advice related to income protection insurance provided by a tax adviser may qualify as a deductible.

However, financial advice fees for life insurance are not deductible.

Financial Advice Association Australia expects to have guidance ready early next year.

“We want to thank the ATO for bringing this matter to a conclusion,” association CEO Sarah Abood said. “With the added clarity surrounding deductions under section 25-5, we believe a significant portion of a typical advice fee will be deductible for the clients of many advisers and practices.

“Increased deductibility of advice fees should help make advice more affordable for many Australians.

“We can now start the process of developing clear guidance for our members on the ATO’s view and how to engage with their clients and accountants on this.”

Click here for the ATO determination.