Simpson Family Trust derived a net income of $40,000 during the 2020/21 tax year. The trust deed provided trust income was to be distributed as follows:

Bill (25 years old, bankrupt) 70 % of any income

Daphne (17 years old daughter, she is a full-time student) 20% of any income

The trust deed also provides that the balance may be either retained or distributed to the beneficiary at the discretion of the trustee.

Required

Explain the trustee and beneficiaries of their tax assessment in respect of the above distributions. You are not required to calculate tax payable, (also do not make a distribution table) but need to clearly list the following.

The name of the beneficiary; whether or not the beneficiary is presently entitled; whether or not the beneficiary is under a legal disability; which sections of the ITAA apply to make the income assessable; who is assessed on each amount; and tax rate applicable to each amount.