The Li Family Trust is a discretionary family trust with two adult resident beneficiaries, Emma and Peter. During this income year, the activities of the trust gave rise to the following:

	$
Loss from rental property	(6,000)
Interest income from term deposits	4,000
Cash received from fully franked dividends	14,500
A capital gain from the sale of BHP shares that had been held for two years	10,000

The trustee of the trust resolved to distribute 100% of the trust income to Emma.

Emma also has the following income:

Salary of $18,000 from which PAYG withholding tax instalments of $2,800 have been deducted.

Work-related expenses of $275.

Emma has private hospital cover.

Based on the facts above:

1 Calculate the taxable income and tax payable or refundable for Emma for the income year.

2 Would your answer differ if the Li Family Trust made a rental loss of $40,000?

Answer

(1) Net income of the trust:

interest income		$4,000+
dividend		14,500+
imputation credit ($14,500 x 30 / 70)		6,214+
Capital gain (50% discount)	5,000+
rental loss		(6,000)-
		=23,714

Taxable income of Emma:

assessable income from trust: s 97		$23,714+
salary ($18,000 + 2,800)		20,800+
work-related expenses	(275)-
		=44,239
Tax liability		5,924
Add: Medicare levy		885
Less: PAYG withholding		(2,800)
imputation credit		(6,214)
Tax refund		(2,205)

Answer already complete however my question is how'd they get

imputation credit ($14,500 x 30 / 70)

where did the 30/70 come from?