Most financial advisers who offer tax advice will not need to pay significantly higher professional indemnity (PI) premiums or obtain extra cover to meet new tax agent registration rules from July 1, according to the Tax Practitioners Board (TPB).

“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 so,” TPB Chairman Ian Taylor said.

Financial planers had raised concerns that PI premiums would soar with the registration of tax advisers in the tax agent services regime.

Under the Tax Agent Services Act financial advisers who give tax advice must register with the TPB, which is working with the Australian Securities and Investments Commission to manage the registration and regulation of tax agents.

Mr Taylor says the TPB has consulted with the Insurance Council of Australia (ICA), insurers and underwriters, and they do not anticipate significant premium rises as a result of the change.

It has also held talks with ICA’s PI insurance committee, which believes most financial advisory companies will meet the requirements with little difficulty and at minimal extra cost.

Financial advisers that register as tax advisers after July 1 must have PI cover that meets TPB requirements.