I’m a life insurance adviser not a tax adviser!

Surely life advisers need some basic understanding of the possible associated tax consequences of their recommendations in order to give clients suitable life and health advice?

Shouldn’t likely tax consequences be discussed with the client, where tax is material to advice decisions the client must make? If you don’t address tax with them, have you given them enough information to make informed decisions?

I think all financial advisers should have an understanding of tax basics. Arguably it’s important to understand the general Income Tax distinction between capital and income receipts, the concepts of exempt income and deductions from income.

For family life and health insurance the income tax position seems reasonably settled. For business insurance, the tax issues appear to be more complex.  Income Tax is not the only concern: GST is also a possible consideration for GST registered policyholders and, if you are advising on Employer Group Insurance, Fringe Benefits Tax may be an issue.