MONEY CLINIC | Can I claim financial advisor expenses against my living annuity income?

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No income tax is payable on any investment gains earned in the living annuity.
No income tax is payable on any investment gains earned in the living annuity.
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A Fin24 reader who was retrenched in 2020 wants to know if he can claim for investment expenses against his living annuity income.

He writes:

I was retrenched last year and appointed a financial advisor for my living annuity investment.

Can I claim the expenses for a financial advisor plus the management and or admin fees of the various funds in the LA against the LA income?

Hedley Lamarque, Financial Planner at BDO Wealth Advisers responds: 

Unfortunately, for tax purposes, a person cannot deduct adviser, management/admin fees, etc. against living annuity income.

A person only pays tax on the income amount drawn from the annuity (if the person’s total taxable earnings are above the tax threshold).

No income tax is payable on any investment gains earned in the living annuity.  

We must also remember that a person would have had a tax deduction, in prior years, for contributions made towards the fund that resulted in the living annuity, for example, retirement annuity, pension fund, etc. 

Questions may be edited for brevity and clarity.

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Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers. Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.

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