PART A

Required: Calculate the tax payable on Buddy's dividend receipts (disregarding

Medicare levy).

Buddy is on the 45% marginal tax rate. He receives the following dividends on 1 February 2023:

• $21,000, fully franked, from UIP Ltd, which pays tax at the 30% tax rate.
• $7,000, 40% franked, from RTS Pty Ltd, which pays tax at the 25% tax rate.

PART B

Required: Discuss the income tax implications arising from the facts below relating to the Taylor Family Discretionary Trust.

Brittney is the trustee of the Taylor Family Discretionary Trust. The beneficiaries include Brittney herself and the members of her family

For the current year, the trust earned rental income of $90,000 and dividend income (unfranked) of $30,000.

The trust also during the tax year paid interest of $20,000 on the loan used to purchase its rental property.

During the current tax year, it made the following distributions:

• $30,000 to Carrie (Britney's daughter), a 24-year-old beneficiary. $10,000 to Brittney herself
• $5,000 to Jim (Britney's son), a 17 year old beneficiary.