When Are Financial Advice Fees Tax Deductible?

InTheBlack recently featured an excellent article clarifying which financial advice fees are considered tax deductible.

As there are no special rules for financial advice fees the costs fall under normal tax deductibility rules, which state that you are allowed a deduction if the expense relates to producing income subject to tax.

 

Setting up an investment portfolio or financial plan:  NO

This is a capital expense and is not tax deductible.

 

Management of an existing portfolio: YES BUT…

Financial fees for managing your investment portfolio are allowed as a tax deduction.  But for the fees to be fully deductible they must relate to earning income.  So if the fee includes advice on insurance premiums or management of private loans then only a proportion of the fee is deductible.

 

Investment loan arranging fee: YES BUT…

This is a borrowing expense and therefore deductible over five years or the life of the loan.  But again, the loan must earn an income which is subject to tax.

 

Cash flow management and other issues: NO

Advice on cash flow management and most other issues does not relate to earning income and is not tax deductible.

 

Commissions: No

These are not incurred directly by you so are not tax deductible.

 

 

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