Q1 (Foreign Pension)

Elizabeth Windsor is 59 years old. She is a resident taxpayer with private health insurance. She also received a government pension from the United Kingdom that is taxable in Australia but not in the United Kingdom. Elizabeth is subject to tax as an Australian resident taxpayer but exempt from tax in the United Kingdom.

During the 2017/18 tax year, Elizabeth derived interest and unfranked dividends of $39,000 and also received $25,000 of pension.

1. Calculate Elizabeths taxable income for the 2017/18 tax year.
2. Calculate Elizabeths tax payable or refundable for the 2017/18 tax year.

More information about this question:

The Foreign pensions :

United kingdom = 8% of the annual amount of pension received.

The 15% tax offset is not available for taxpayers aged less than 56 years unless they retire due to permanent disability.

Less than 56 = no tax offset

56 to less 60 = 15% tax offset

60 and over 10% tax offset if in relation to untaxed element or no tax offset if in relation to taxed element which is tax free.