(Trusts - Discretionary distribution)

The estate of the Late Olivia Little (died 2015) derived a net income of $140,000 during the 2017/18 tax year.

The will provided that trust income was to be distributed as follows:

The Will also provide that the balance be either retained or distributed to a beneficiary at the discretion of the trustee. During the tax year, an additional amount of $9,000 was paid towards Rosa's overseas trip.

Required:

• Tim Her husband 40% of any income
• Shaun Her 25-year-old son who has been certified insane 25% of any income
• Rosa Her 20-year-old daughter who is a full-time student 15% of any income
• Kristy Her 17-year-old daughter who is employed full-time 10% of any income

Complete the following table (covering all beneficiaries) nominating:

Name of the BENEFICIARY

Whether or not the beneficiary is PRESENTLY ENTITLED

Whether or not the beneficiary is under a LEGAL DISABILITY

WHO IS ASSESSED on each amount?

Which sections of the ITAA36 apply to make the income assessable?

The AMOUNT retained or distributed.

Beneficiary

Presently entitled? (Yes/No)?

Legal disability? (Yes/No)?

Who is assessed?

(Beneficiary or Trustee)

ITAA36?

Section(s) Applicable

Amount $?

Tim

Shaun

Rosa

Kristy

Balance

Total