Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

QUESTION 9 Clarence is an 80-year-old fisherman. The fishing business is currently in his name. For the year ended 30 June 2020 the business was

QUESTION 9

Clarence is an 80-year-old fisherman. The fishing business is currently in his name. For the year ended 30 June 2020 the business was extremely profitable deriving a taxable income of $1,200,000. The boats and other assets are currently in Clarences name and he would like to plan for his retirement. Clarence has two children John and Brett. Clarence decides to put the assets into the Clarence Family Discretionary Trust with the John Family Trust and Brett Family Trust as beneficiaries. This means the net income of the Clarence family trust will be split between the two family trusts.

REQUIRED

Clarence seeks your advice on whether:

  1. Part IVA of the Income Tax Assessment Act 1936 would apply to this arrangement?

Make sure that you explain your answer.

  1. If Part IVA does apply, explain to Clarence what the consequences would be.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost Accounting A Managerial Emphasis

Authors: Charles T. Horngren, Srikant M. Datar, George Foster

11th Edition

013099619X, 978-0130996190

More Books

Students also viewed these Accounting questions

Question

Dont off er e-mail communication if you arent going to respond.

Answered: 1 week ago