Answers must be calculated with regard to Australian tax rules and rates.

1) In the 2014/15 year James has a gross salary of $100,000 and currently makes $7000 in personal superannuation contributions each year to his employer's complying superannuation fund. He has appropriate private health insurance. James is considering investing $12,500 each year into his superannuation through salary packaging. Calculate the benefit arising from this proposal. (150 words plus calculations)

2) Loris owns a rental property. On 9 December 2014 she made an interest-only prepayment of $17,500 in relation to the investment property loan to cover the period 10 December 2014 to 10 March 2016. She had been advised she could claim the entire amount as the period of service ended in the next income year and, as her turnover was easily less than $2 million, she was a small business entity. She also made a prepayment of $950 on the council rates. Calculate the interest and council rate deductions Loris can claim. (300 words plus calculations)