Financial advisers will be able to provide tax advice until June 30 next year under an extension announced by Assistant Treasurer Bill Shorten.

The extension was agreed after a meeting with Treasury, the Tax Practitioners Board (TPB) and the Australian Securities and Investments Commission (ASIC), as well as financial services lobby groups.

But from July 1 next year advisers must meet the same standard as tax agents, and they will be required to register through ASIC with the TPB to provide tax advice.

If an adviser is providing general factual tax information they will not be required to register.

Advisers selling life insurance to individuals will not be caught up in the new regulations, but recommending a policy through a self-managed superannuation fund because of the tax advantages might involve extra registration requirements.

GMK Partners Director Taxation Chris Wookey says life insurance offered through superannuation will probably be an area where the new rules would come into effect.

“There will be areas such as an individual taking out a life policy that is then paid for by his employer that will need some tax advice,” he told insuranceNEWS.com.au. “There would be fringe benefit tax implications.”

Mr Shorten says advisers wanting to give tax advice will have to have the relevant tax qualifications.

“Further consultation would be carried out by the TPB and ASIC on the nature of these competencies and the proposed level of the additional qualifications,” he said. 

“Without pre-empting the outcome of this process, participants (at the meeting) thought that the level of the qualification might be equivalent to that of a Diploma (of Financial Planning).

“Tax competencies would be determined by the TPB after consultation.”