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This site contains information pertinent to both Franchisee and independent agents alike. To keep up to date as to what is happening in the national real estate industry, keep coming back to the site and check out NREFA's Industry News section.

This Month's issues:

	The ATO Draft Ruling on Tax Determination. (More Information)

ATO has requested comments on the draft ruling by the end of the month, could you please review the draft ruling (in pdf) in preparation to provide any comments to the REIA by Wednesday 28 July . 

The essence of the draft ruling is as follows:

• Paragraph 25 1L(1)(b) of the Income Tax Assessment Act 1936 (ITAA 1936) prohibits persons other than registered tax agents from charging a fee for ‘giving advice about a taxation law on behalf of a taxpayer’.

   

• Paragraph 251L(1)(b) does not prevent a person in a non-representational capacity from giving tax advice that is part of, or incidental to, another service. For instance, a financial services provider can provide tax advice about a financial transaction, arrangement or plan in accordance with the relevant requirements of the Corporations Act 2001. 

   

• It is ultimately a question of degree, determined by reference to the circumstances of each case, as to whether or not a service provider acts in a representative capacity.  Tax advice given by a person acting in a capacity, other than that of a registered tax agent, falls outside the scope of paragraph 251L(1)(b). For instance, a financial services provider can give tax advice about a financial transaction, arrangement or plan in accordance with the relevant requirements of the Corporations Act 2001. This advice would not ordinarily be provided by the financial services provider in a representational capacity. 

Example 9 of the draft ruling:

1. James is a real estate agent.  He is also studying accountancy.  He arranges the sale of an investment property on behalf of a client and advises that capital gains tax is payable by the vendor.  For an additional fee, James offers to calculate the capital gains tax liability and prepare the tax return of the vendor. 
2. As James is charging a fee for this service, not a registered tax agent and acting in a representational capacity he is in breach of paragraph 251L(1)(b).