Edited version of private advice

Authorisation Number: 1052257141356

NOTICE

This is an edited version of a revised private ruling. It replaces the edited version of the private ruling with the authorisation number 1012891849235.

Date of advice: 17 June 2024

Ruling

Subject: GST and adviser services

Question 1

Have you made an acquisition, for the purposes of section 11-5 of the GST Act, from Financial Advisers as agent for the Licensee in respect of the Advisor Service Fees (ASF) paid under the Service?

Answer

No, you have not made a creditable acquisition from the Financial Advisers as authorised representative for the Licensee in respect of the ASF paid under the Service.

Question 2

If the Commissioner determines Question 1 in the affirmative, are you entitled to a reduced input tax credit, for the purposes of Division 70 of the GST Act, for the ASF?

Answer

A response is not necessary as you is not entitled to a RITC in respect of the ASF.

This ruling applies for the following period:

Date of issue till quarter ending 30 June 2028

Relevant facts and circumstances

You provide financial products and services (the Service).

You are registered for GST in your capacity as trustee and operator of the Service in which clients invest indirectly in underlying securities and investments.

You have provided a number of attachments in your ruling request that set out the framework within which each of the parties operates. However generally, the adviser services considered in this private ruling arise under the following arrangement:

•         A client (which may or may not already be investing in the Service) engages a Financial Adviser. The client meets with the adviser to ascertain their investment goals and obtains Personal Advice. You are not party to this engagement. The client can invest through the Service and in cases without an adviser.

•         After obtaining Personal Advice and investing through the Service, the client instructs and authorises you to pay the ASF to the adviser (on the client's behalf) by deducting an amount from the client's investment portfolio held within the Service.

•         You will only pay ASF to advisers in circumstances where the adviser holds an AFSL and is registered with you. To be registered, the adviser must agree to certain terms and conditions as set out by you. These terms and conditions generally establish an administrative arrangement for the payment of the ASF.

•         If you do not pay the ASF as requested by the client (for example, because of insufficient funds in the client's investment portfolio), the client remains personally liable to the adviser for the ASF.

•         Under no circumstances do you provide personal financial advice to an investor.

Relevant legislative provisions

A New Tax System (Goods and Services Tax) Act 1999 Section 11-5

A New Tax System (Goods and Services Tax) Act 1999 Section 11-15

A New Tax System (Goods and Services Tax) Act 1999 Section 70-5

A New Tax System (Goods and Services Tax) Regulations 2019 Section 70-5.02

Reasons for decision

You have not made a creditable acquisition from the Financial Advisers as authorised representative for the Licensee in respect of the ASF paid under the Service. It follows that you are not entitled to claims RITCs under section 11-5 and Division 70 of the GST Act and subsection 70-5.02(1) of the GST Regulations in respect of the ASF. The ASF are not consideration for any taxable supply made by the financial advisers to you. To the extent that you may be making an acquisition from the financial advisers (for example in respect of obligations under a registration form), the ASF are not consideration for that supply.

It is not necessary to consider the extent of RITCs available.