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  • Payments of conflicted remuneration

    If you're an investor, you may need to include any amounts of 'conflicted remuneration' you receive as income in your tax return. These amounts are sometimes called a 'rebate'.

    Conflicted remuneration means benefits given to a financial adviser that might influence the advice they give or the products they recommend to a client.

    A key recommendation of the Banking, Super and Financial Services Royal Commission was to end the payment of grandfathered conflicted remuneration to financial advisers. Law changes made in response to the recommendation mean that conflicted remuneration paid to financial advisers will be banned from 1 January 2021.

    As a result of these changes, as the investor, you may receive:

    • payment of an amount based on what the financial adviser would have been paid
    • an equivalent benefit in another form.

    If you directly receive a payment based on the amount the financial adviser would have been paid, that amount is separate from anything you are entitled to receive from your investment. For example, the payment will not be a superannuation or annuity payment.

    Depending on how you receive the conflicted remuneration you may need to include any amounts as income in your tax return. If you receive the conflicted remuneration as:

    • one or more separate payments, then it will be assessable as ordinary income - show the amount at 'Other income', Category 4 label V in the individual income tax return (supplementary section)
    • a benefit in a form other than a payment, then you should seek advice from your tax adviser or us regarding the tax treatment.

    See also:

      Last modified: 15 Dec 2020QC 64424