On 1 July 2016 Patrick Paul established the AKL discretionary trust ('the trust') for the benefit of two beneficiaries who are Australian tax residents, Ellen (21 years old) and Sam (17 years old). The trustee of the trust is James Conway. During the year ended 30 June 2020, the receipts and outgoings for the trust were as follows:

Receipts

Franked dividend income $20,300

Dividend income (franked to 70%)$18,000

Income from unfranked dividends$13,300

Interest income$2,000

Rental income$25,000

Outgoings

Rates and land tax on the trust's rental property$ 5,800

Deductible repairs to the trust's rental property$ 3,220

During the 2019/20 income year Ellen was presently entitled to and received $25,000 of net trust income. She also received net wages of $24,000 in the same income year, from which PAYG withholding of $2,870 had been deducted. Ellen does not have any private health insurance.

During the 2019/20 income year Sam was presently entitled to and received $12,500 of net trust income. Sam is a full-time student and 2019/20 he received $10,500 from a part time sales job (no PAYG amounts were withheld from his wages). Sam does not have any private health insurance.

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Required:

a)Calculate the net trust income under s 95 ITAA36 for the year ended 30 June 2020.

[1 mark]

b)Explain the tax consequences of Ellen's receipts in 2019/20. Your answer should include an explanation of who is assessed, the calculation(s) of tax payable in respect of all receipts, and the legislation that applies at all relevant parts of your answer.

[3 marks]

c)Explain the tax consequences of Sam's receipts in 2019/20. Your answer should include an explanation of who is assessed, the calculation(s) of tax payable in respect of all receipts, and the legislation that applies at all relevant parts of your answer.

[5 marks]

d)Explain the tax implications of any net trust income to which no beneficiary is presently entitled. Your answer should identify relevant legislation and include acalculation of any tax payable, if applicable.