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Payments of conflicted remuneration

Payments of conflicted remuneration you receive may need to be included as income in your tax return.

Last updated 25 April 2023

What is conflicted remuneration?

Conflicted remuneration means benefits given to a financial adviser that might influence the advice they give or the products they recommend to a client. You may also know these amounts as a 'rebate'.

Conflicted remuneration changes

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 have been 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.

Conflicted remuneration and your tax return

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.
    • If completing paper return, show the amount at Other income, Category 4 label V in the supplementary tax return
    • If completing your return in myTax, show the amount at Other income, select Financial investments not shown elsewhere under Type of payment
     
  • a benefit in a form other than a payment, then you should seek advice from your tax adviser or us regarding the tax treatment.

For more information, see ASIC – RG 246 Conflicted remuneration and other banned remunerationExternal Link.

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