Australian Tax Law

PART A (12 Marks)

Monica who is aged 54, is employed as a Senior Manager with Abacus, a large accounting firm based in Sydney. During the 2020 tax year Abacus contributed $20,000 into QRest Super, which Monica advised is her complying Superannuation Fund of choice. In addition, on 30 June 2019 Monica entered into a salary sacrifice arrangement with Abacus to sacrifice 20% of her 2020 salary into superannuation. This results in an additional contribution of $52,000 for the 2020 tax year. This is the first time Monica has made a salary sacrifice arrangement. Monicas marginal tax rate is 45% (excluding Medicare Levy) and her superannuation balance as at 30 June 2020 was $900,000.

Discuss the tax consequences for Monica and Abacus (if any) arising in relation to the above facts.

NOTE: Your answer must be supported by reference to relevant legislation, case law and/or tax rulings.