New ATO Guidance: When You Can Claim a Deduction for Financial Advice Fees
(TD 2024/7 – Effective 12 June 2024)

The ATO has recently released Taxation Determination TD 2024/7, providing much-needed clarity on when financial advice fees are tax deductible.

📌 What’s Changed?

In the past, it was often unclear whether fees for seeing a financial planner or adviser were deductible. The new guidance outlines specific conditions where you can or cannot claim these fees in your individual tax return.

✅ What Financial Advice Fees Can Be Deducted?

You can claim a deduction if the fee relates to managing your existing investments or income-producing assets, such as:

• Advice on rebalancing your investment portfolio
• Strategic advice on how to generate assessable income (e.g., planning around dividends, rental income, or interest)
• Ongoing advice fees related to maintaining and adjusting an income-generating investment strategy

 Example: You pay a planner to review your existing shares and suggest tweaks to improve dividend returns. That fee is deductible.

🚫 What Financial Advice Fees Are Not Deductible?

You cannot claim a deduction for:

• Initial advice fees about your overall financial position
• Advice on how much to contribute to super
• Fees relating to setting up new investments
• Insurance product advice (e.g., life insurance inside super)

Example: You pay a planner for a one-off comprehensive plan about your financial goals, retirement age, and how much super to contribute. That fee is not deductible.

📅 When Do You Claim the Deduction?

You claim the deduction in the income year the expense was incurred, even if the investment or strategy plays out over multiple years.

📂 Documentation Matters

The ATO expects proper documentation to separate deductible advice from non-deductible advice. Your adviser should break down the invoice into deductible and non-deductible components.

Need help? we're here to help you assess whether your financial advice fees are deductible and how to ensure you’re maximizing your return while staying ATO-compliant.

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