Claiming financial advice fees
You can claim deductions for fees you pay to your financial adviser, however there are limits on what you can claim. We outline below what you can and can't claim.
To be deductible, you must pay the financial advice fees yourself. For example, you can't claim a deduction if the amount comes from your super fund member’s balance.
If you seek financial advice for multiple purposes, you may not be able to claim a deduction for the full amount of the fees. You need to apportion the fees between each purpose and keep records to support your apportionment. For example, an itemised invoice from your financial adviser.
What you can claim
You can claim a deduction for financial advice fees in limited circumstances, including:
- ongoing management fees for income producing investments (for example, regular annual or semi-annual reviews of the performance of your investments)
- fees for advice about whether the mix of your income producing investments is still appropriate and whether to keep or sell those assets
- fees for advice on income protection insurance products
- the portion of the fees to the extent that it relates to managing your tax affairs. For example, advice on how the tax laws apply to your personal circumstances.
What you can’t claim
You can’t claim a deduction for financial advice fees you pay for:
- initial advice on a proposed investment (but you may be able to include these costs in your cost base or reduced cost base to work out your capital gain or loss when you sell the investment)
- advice on how to invest additional funds to grow your existing investment portfolio
- a new financial adviser at the start of a new advisory engagement
- advice on taking out life, total and permanent disability or trauma insurance
- advice about your household budgeting (those are private or domestic expenditure and not deductible).
For more information, see Taxation Determination TD 2024/7 Income tax: deductions for financial advice fees paid by individuals who are not carrying on an investment business.