On the 1 st July 2019, a wealthy retiree, King Tut died. He was a resident of
Question:
On the 1st July 2019, a wealthy retiree, King Tut died. He was a resident of Australia aged 80 at the time of death.
He left a will, and the Executor/Trustee was required to manage his assets to produce an income stream for his beneficiaries.
Under the prudent control of the Executor/Trustee, the estate derived net income of $200,000 during the tax year ending 30 June 2020.
The Will of the deceased provided that income was to be distributed as follows:
Genevieve (his wife) 30% of any income
Jessie (his daughter) 20% of any income
Ellie (his 2nd daughter) 10% of any income.
None of the beneficiaries are under a legal disability.
In addition, the Will provides that the balance may be either retained or distributed to a beneficiary at the discretion of the trustee. During the financial year, an amount of $7,000 was also paid towards Ellie’s college fees.
The ATO is interested in this income.
Required
Advise who is assessed for the net income of the trust and explain which sections of the Act apply in making these amounts assessable?
Federal Taxation 2016 Comprehensive
ISBN: 9780134104379
29th edition
Authors: Thomas R. Pope, Timothy J. Rupert, Kenneth E. Anderson