I spoke to a bank today to ask about re-categorising a loan from investment to owner occupier. It's a mixed-purpose loan, predominantly for owner-occupier but partly for investment. They told me that I wouldn't be able to deduct any interest for my tax if the loan was recategorised to owner occupier, even if part of the loan was for investment purposes!
And thats why they arent pemitted to give tax advice. They arent qualified. That view is wrong. Hard to see how the information or apparent view could be negligent since its evident they arent qualified as tax practitioners and the taxpayer would be submitting their own return. Not the bank. Goes to show you need a good solicitor, broker and tax adviser.
Nah over the phone. When I asked them why they were giving me tax advice, they backtracked and suggested I speak with my accountant.
It would get more attention of you submit a complaint to the bank about staff giving flawed tax guidance. Its no tax agent service and was a factual misstatement and not given as tax advice. Negligence will require more than saying something incorrect. Some numpty in a call centre wont have a standard of care to fulfil. If one even exists for taxation in such a case.... Then no damage and likely little if any causation. Its not like you sought tax advice from the bank call centre. Now if you called Terry who is your broker and he was off in lala land after a few beers (and even then I would doubt he would ever say it) and said that it could become a issue if a loss or damages consequentially occur. You know Terry knows loans and tax and believe what he says in a professional capacity that includes tax and credit advice. But I would argue any tax adviser who sees the tax work would ask - Dont you have a loan on this property and the issue would be detected. No loss. No damages. Terry is off the hook for negligence.
Interestingly, it was part of a complaint resolution process and I believe it was an attempt to dissuade me from asking for the loan category shift which was the matter of the complaint. Not planning on doing anything about it at the moment, just thought it was weird.
I saw a broker advertising that they are providing advice on debt recycling strategies. That also involves tax advice. Complaints can be made Complaints | TPB
It may also be a concern for the credit advice if there is no lawful tax advice supporting the debt strategy. I find the TPB just looks at the issue of tax agent services and then issues a caution letter. One of the greater flaws in the TPB process is some lawyers and financial planners and property spruikers !!. Solicitors are certainly able to provide tax advice to the extent they are competent to do so (as tax laws are ...laws) BUT when they then commence to provide personal calculations etc that then requires tax agent registration. Solicitors acting for an estate administration have a limited exception in fulfilling the tax obligations of the deceased estate. And one technical "out" can be the charging of a fee for the service. They may argue they didnt charge a fee for the tax agent service. Tax agent services are services relating to: ascertaining (that is, working out) or advising about liabilities, obligations or entitlements of entities (that is your clients) under a taxation law representing entities in their dealings with the Commissioner of Taxation (Commissioner) in relation to a taxation law where it is reasonable to expect the entity will rely on the service to satisfy liabilities or obligations, or to claim entitlements under a taxation law. s50-15 of the TAS (2009) Act contains a more dangerous provision and removes the need for providing tax agent services or charging a fee. More typical to apply to a financial adviser, solicitor or professional who represents that as part of their services they will advise on tax and in doing so represent providing tax agent services. 50‑15 Representing that you are a registered tax agent, BAS agent or tax (financial) adviser if unregistered You contravene this section if: (a) you represent that you are a *registered tax agent, BAS agent or tax (financial) adviser; and (b) that representation is untrue. I recently encountered this when I made complaint about the appalling conduct of a property spriker flogging property to smsfs. ASIC took to them and also referred this to the TPB who contacted me for further information then acted using s50-15. The seminar misrepresented "them" as providing tax advice when a practice unrelated to the property seminars would give that advice. I beleieve they also had issues with the tax agent permitting such marketing to include their profile etc when they were not in attendance and on the (now closed) website.
s50-5 actually says 'you charge or receive a fee or other reward for providing the tax agent service' so it can apply even where a bank or broker does not charge the client a fee as they would be receiving an 'other reward'.
The nexus between the reward / fee and the apparent advice may need to be more distinct. A broker would receive a fee for facilitating a loan. I havent seen a case either way. A credit adviser could have a Australian credit license impact I suspect. I have a client whose broker was lodging online PAYGW variations that were always excessive affecting the client with a tax debt. I ended up calling them (no mention of who the client was) and cautioned if I saw another example I would report it to the TPB. He said he would never do it again and next year client said his broker no longer assists with variations . I suspect in that case the other reward could be merely maintaining a client and any trail.
A reward connective with the tax advice. but saying something is deductible is actually legal advice because it is an interpretation of legislation.
