Required: (a) Calculate net trust income. (3 marks)

(b) Prepare a trust distribution statement showing how the income of the trust estate for the current tax year would be assessed. Discuss your answer by referring to relevant income tax legislation. (9 marks)

(c) Calculate tax payable by the trustee and each beneficiary. Discuss your answer by referring to relevant income tax legislation. (6 marks)

Q5. Trevor is the trustee of a resident trust estate created by deed. The deed names Dianne and Neville as the beneficiaries of the trust, neither of whom are related to Trevor. The trust is a fixed unit trust under which each named beneficiary holds a unit entitling them to 50% of the income from the trust during the current tax year. Dianne and Neville are both residents of Australia, with Dianne being aged 13 years and Neville aged 23 years. The following information regarding the trading activities of the trust during the current tax year is given: 60,000 Receipts: Net income from trading activities Interest income Rental income 20,000 50,000 Total 130,000 Expenses: Interest paid on money borrowed to invest Expenses incurred in earning rental income 35,000 15,000 Total 50,000 Neville derived salary income of $5,000 from a separate job during the current tax year and Dianne separately received $1,000 worth of interest income during the current tax year from government bonds which had been given to her. Q5. Trevor is the trustee of a resident trust estate created by deed. The deed names Dianne and Neville as the beneficiaries of the trust, neither of whom are related to Trevor. The trust is a fixed unit trust under which each named beneficiary holds a unit entitling them to 50% of the income from the trust during the current tax year. Dianne and Neville are both residents of Australia, with Dianne being aged 13 years and Neville aged 23 years. The following information regarding the trading activities of the trust during the current tax year is given: 60,000 Receipts: Net income from trading activities Interest income Rental income 20,000 50,000 Total 130,000 Expenses: Interest paid on money borrowed to invest Expenses incurred in earning rental income 35,000 15,000 Total 50,000 Neville derived salary income of $5,000 from a separate job during the current tax year and Dianne separately received $1,000 worth of interest income during the current tax year from government bonds which had been given to her