Ben and Jane are married homeowners and they believe they are paying too much tax on their annual earnings and seek your advice on restructuring their income and assets to help reduce their tax. Ben is a trust fund baby and is paid an income of $52,000 p.a. from his grandparents family trust (which is a PIE cash trust). Bens PIR is 28%. Jane is a part-time radiographer and her income varies from $32,000 to $45,000 each year depending on any loading she receives for weekend work. Jane has a direct share investment portfolio and earns $16,000 from this which is paid to her directly. Jane has a KiwiSaver with the widely held ANZ KiwiSaver account but Ben has never been employed and has not opened a KiwiSaver account. Jane states she has never given her KiwiSaver provider her tax information.

(a) What taxes do you expect Ben to pay and at what rate?

(b) Calculate the taxes you expect Jane to pay and at what rate, assuming she earns $45,000 this year. Show all workings.

(c) If Jane receives a full imputation tax credit for her share investment income of $16,000, what deduction would she receive on her other income taxes? Show all workings.

(d) What is Janes expected marginal tax rate for the year (excluding the ACC earners levy)?