Changes to your accounts
GST updates on adviser service fees
The Australian Taxation Office (ATO) has advised that super funds and Investor Directed Portfolio Service (IDPS) platforms will no longer be able to claim the reduced input tax credit (RITC) on adviser services fees.
This new change will take effect from 1 July 2024.
The effect of this is similar to a discount; even though we received the full adviser service fee we agreed on, the actual fee you paid from your account was less than the amount we agreed when taking the credit into account.
Going forward, the ATO will no longer allow super funds and IDPS platforms to claim this GST credit. From June 2024, the adviser service fee charged to your account will increase by the amount of the credit.
This does not change our arrangement and there is no action you need to take.
The example below shows how the change may affect you:
| EXAMPLE: (illustrative purposes only)
Currently, where an investor agreed to pay an adviser service fee of $1,100 (including $100 GST), the RITC claimed would have been $75 and the amount paid from their account would have been $1,025. Once this change comes into effect, the same adviser service fee of $1,100 (including $100 GST) paid from an investor’s account would be $1,100. Please see a detailed breakdown of this example below. |
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| Adviser Service fee breakdown | Current state | Future state |
| Adviser service fee excluding GST | $1,000.00 | $1,000.00 |
| GST amount (10%) | $100.00 | $100.00 |
| Adviser service fee including GST (amount paid to the adviser) | $1,100.00 | $1,100.00 |
| RITC rate | (7.5%) | 0% |
| RITC benefit passed on to the investor | ($75.00) | $0.00 |
| Adviser Service fee amount paid from the investor’s account: | $1,025.00 | $1,100.00 |
Please note: this is a tax increase set by the ATO and not an increase in our adviser service fees.
