Statement of Advice 2 - Advice on company franking account and distributions (10 marks for technical and calculation accuracy; refer to marking rubric for more guidance) Julia and John seeking your advice regarding Smart Solutions Ply Wid's franking account. (Please note: use all figuresfinformation provided from Statement of Advice 1 above to construct the franking account for 2021/22. Opening balance is provided below). Required 1) 1 July 2021, the balance in Smart Solutions Pty Ldd's franking account was \$18,721. Construct Smart Solutions Pty Lld's franking account for the 2021/22 financial year. You also need to calculate the franking account balance as at 30 June 2022. 2) Smart Solutions Pty Lid wishes to pay a final fully franked dividend of $40,000 on 30 June 2022. However, Julia and John are concerned about the franking account to go into deficit. Calculate and advise the maximum frankable distribution amounts that Smart Solutions Pty Ltd can pay as fully franked dividend. What are the tax consequences if Smart Solutions Pty Ltd goes ahead and pays $40,000 fully franked dividend on 30 June 2022? 3) Assuming Smart Solutions Pty Ltd paid $40,000 fully franked dividend on 30 June 2022 (only dividend paid for the year), comment on the tax treatment of the dividend to the following four (4) shareholders: - Julia and John Smart receive a dividend of $15,000 each. They are Australian residents at the highest marginal tax rate. - $5,000 to Justin Smart, the son of Julia and John, who has been studying in London for three years and is a foreign resident. - $5,000 to Leaf Pty Ltd, an Australian private company with a 30% company income tax rate. I Advise how each of the above four shareholders of Smart Solutions Pty Lid would be taxed on the distribution received in 2021/22. Statement of Advice 3 -Advice on net capital gains ( 10 marks for technical and calculation accuracy; refer to marking rubric for more guidance.) Since 1997 John and Julia have invested in various Australian shares. Julia acquired the shares in her own name whereas John had bis company Smart Solutions Pry Ltd acquire his share portfolio. On 20 August 2022 both Julia and John made a decision to dispose of their Australian shares and the proceeds and purchase prices information are as follows. Smart Solutions Ptv I td eharn nortentin Other information Julia has a capital loss of $600 carried forward from sale of painting during 2018. Required 1) Advise both Julia and John on the CGT consequences of their share sales. 2) Calculate net capital gains for the 2021/22 tax year. You must provide all methods available for her and choose the best method to minimise net capital gains for Julia and John (Smart Solutions Pty Ltd). Statement of Advice 2 - Advice on company franking account and distributions (10 marks for technical and calculation accuracy; refer to marking rubric for more guidance) Julia and John seeking your advice regarding Smart Solutions Ply Wid's franking account. (Please note: use all figuresfinformation provided from Statement of Advice 1 above to construct the franking account for 2021/22. Opening balance is provided below). Required 1) 1 July 2021, the balance in Smart Solutions Pty Ldd's franking account was \$18,721. Construct Smart Solutions Pty Lld's franking account for the 2021/22 financial year. You also need to calculate the franking account balance as at 30 June 2022. 2) Smart Solutions Pty Lid wishes to pay a final fully franked dividend of $40,000 on 30 June 2022. However, Julia and John are concerned about the franking account to go into deficit. Calculate and advise the maximum frankable distribution amounts that Smart Solutions Pty Ltd can pay as fully franked dividend. What are the tax consequences if Smart Solutions Pty Ltd goes ahead and pays $40,000 fully franked dividend on 30 June 2022? 3) Assuming Smart Solutions Pty Ltd paid $40,000 fully franked dividend on 30 June 2022 (only dividend paid for the year), comment on the tax treatment of the dividend to the following four (4) shareholders: - Julia and John Smart receive a dividend of $15,000 each. They are Australian residents at the highest marginal tax rate. - $5,000 to Justin Smart, the son of Julia and John, who has been studying in London for three years and is a foreign resident. - $5,000 to Leaf Pty Ltd, an Australian private company with a 30% company income tax rate. I Advise how each of the above four shareholders of Smart Solutions Pty Lid would be taxed on the distribution received in 2021/22. Statement of Advice 3 -Advice on net capital gains ( 10 marks for technical and calculation accuracy; refer to marking rubric for more guidance.) Since 1997 John and Julia have invested in various Australian shares. Julia acquired the shares in her own name whereas John had bis company Smart Solutions Pry Ltd acquire his share portfolio. On 20 August 2022 both Julia and John made a decision to dispose of their Australian shares and the proceeds and purchase prices information are as follows. Smart Solutions Ptv I td eharn nortentin Other information Julia has a capital loss of $600 carried forward from sale of painting during 2018. Required 1) Advise both Julia and John on the CGT consequences of their share sales. 2) Calculate net capital gains for the 2021/22 tax year. You must provide all methods available for her and choose the best method to minimise net capital gains for Julia and John (Smart Solutions Pty Ltd)
