AMP recently received guidance from the Australian Taxation Office (ATO), that from 1 July 2024 Super Funds and IDPS operators will no longer be able to claim a Reduced Input Tax Credit (RITC) on behalf of members for Advice Fees collected by the platform.
We’re working through what this means for you and your clients and will continue to closely monitor developments and issue further guidance as required. We’re notifying you now, so you can prepare your clients for this change.
What’s changing?
Currently, the RITC provides your clients with a 75% discount on the GST charged on Advice Fees collected through the platform.
For example, when you are charging an Advice fee of $110 (inc GST) the client is receiving a credit of $7.50 therefore paying a net amount of $102.50. From 1 July 2024, clients will be charged the full GST amount. In the example above, the full $110 will be collected from the client and paid to your licensee.
While the fees you charge will remain the same, the amount collected from your client for advice fees will increase by the RITC amount.
When is the change effective?
The GST charged on Advice Fees will increase for clients for all fees collected from 1 July 2024.
What are the impacts to clients?
Advice Fees collected from client accounts will increase by approximately 7.3% as per the ATO’s updated guidance.
What do I need to do?
We recommend you review your Advice fees and discuss the impending change with your clients.
More information
As previously mentioned, we’ll notify you of any updates. If you have any questions, please speak to your Business Development Manager.
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This article has been provided by NMMT Limited ABN 42 058 835 573, AFSL No. 234653 (NMMT) for professional adviser use only. The comments expressed represent the personal views and opinions of the adviser. MyNorth Lifetime is a part of MyNorth Super and Pension which is issued by N. M. Superannuation Proprietary Limited (ABN 31 008 428 322, AFSL 234654) (NM Super) as trustee of the Wealth Personal Superannuation and Pension Fund (the Fund) ABN 92 381 911 598. It’s important a person considers their circumstances and reads the relevant product disclosure statement and/or investor directed portfolio services guide and target market determination, available from northonline.com.au or by contacting the North Service Centre on 1800 667 841, before deciding what’s right for them.
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