Giuseppe Gioia, his wife Giulietta and mother Giovanna, operate a mobile gourmet pizza business, through a family discretionary trust trading as Joe’s Mobile Gourmet Pizza & Pasta (JMGPP). Giuseppe is the trustee of the business.

Interest, salaries, drawings  

I drew down a salary of $500/week and on one occasion Giulietta withdrew $4,000 from the business to help pay for a relative’s medical expenses. Of course, on both matters, I paid 9.5% Superannuation Guarantee on the relevant amounts.  In addition, I received $1,000 interest from the trust in my loan account, which is fair because I set up the business settling the contribution to purchase the bus and original fit-out which was sourced from my inheritance papa had left me.  The interest rate is very low and competitive - there has been no excessive benefit to me.

Required:

State:

• The relevant legislative authority and/or case law authority a reason why the facts apply to the law, explaining the impact of the tax effect, and the final effect on taxable income/tax liability

Answer rating: 100% (QA)

The Applicable Tax Authority is the concerned local tax authority in the area where the business is undertaken or jurisdiction of the concerned local ... View the full answer