Marc Jansen and his best friend Luke Ng met many years ago when they were each doing their chef apprenticeships. Just after gaining their chef qualifications, they formed a fine dining restaurant business trading through a company Rose Lantern Pty Ltd, where each of them has an equal interest. The shares in the company are held by their family trusts: the Jansen Family Trust and the Ng Family Trust. Marc and Luke are the directors of Rose Lantern Pty Ltd and draw salaries from the company. Jenni Jansen (Marcs wife) is employed by Rose Lantern Pty Ltd to provide administration services for the company. The beneficiaries of the Jansen Family Trust are Marc, Jenni, Suzi (their 19 year old daughter who is studying at university), Anton (their 13 year old son), and Jansen Investments Pty Ltd. Rose Lantern Pty Ltd This company operates the restaurant and was highly profitable during the 2021/2022 year. However, it has not always been so and the company has prior year losses of $140,000. The clients have been provided the following transactions details for the 2021/2022 year. Rose Lantern Pty Ltd paid a salary of $55,000 (tax withheld of $8,342) to Marc, as well as $85,000 (tax withheld of $18,092) to Jenni. Wage costs to other staff was $2,260,000. Superannuation of 10% was been paid on all salaries. The June 2022 superannuation liability of $27,400 was paid on the 10 July 2022. Sales for the year were $15,500,000 and COGS were 60% of sales. Other overhead costs for the year were $2,600,000. The company received $175,000 in JobKeeper payments from the government during the year to help the business get through COVID. Luke was diagnosed with cancer in June 2021 and decided to sell out of the business on 1 July 2021 to focus on his health. He sold all the shares held by his trust to the Jansen Family Trust, making the Jansen Family Trust now the sole shareholder of the company. No other changes to the operation of the business occurred. On 1 December 2021, Rose Lantern Pty Ltd paid a dividend of $620,000 fully franked (at 25%) before any franking credits, and PAYG instalments of $263,000 for the 2021/2022 year including an amount of $25,500 in July 2022. The opening franking credit at 1 July 2021 was $205,000. Rose Lantern Pty Ltd meets the tests of being a base rate entity and is therefore eligible to pay tax at the reduced rate for 2021/2022. Jansen Family Trust This trust is a shareholder of Rose Lantern Pty Ltd. The net income of the trust is to be distributed as follows to its beneficiaries in the 2021/2022 year: Marc 15% Jenni 15% Suzi* 25% Anton 5% Jansen Investments Pty Ltd 40% Note. *Suzi has a prior year loss of $40,000.