1. The following persons are resident taxpayers who are not liable for the Medicare Levy Surcharge. The information given relates to the 2016/17 tax year:

a- Glenn derived taxable income of $22,000 and his wife Rowena derived taxable income of $6,000. They do not have any children.

b- Kath derived taxable income of $41,000 and her husband Fred derived taxable income of $18,000. They have three dependent children

c- Beck derived taxable income of $29,000 and her de facto partner Roy derived taxable income $40,000. They have four dependent children.

d- Will derived taxable income of $36,000 and his wife Tina derived taxable income of $22,000. They have two dependent children.

Q2. Fred, a resident taxpayer aged 47, has taxable income of $145,345 and reportable fringe benefits of $17,170. During the year Fred has paid PAYG tax instalments totalling $13,480. His wife, Jani, has taxable income of $27,000.

They have seven children and no private health insurance.

Required: Calculate Fred’s net tax payable for the 2017/18 tax year.

Q3

Ned Markson is a resident taxpayer employed by Acme Holdings Ltd. The following transactions were all as a consequence of Ned’s employment:

• Net weekly wages totalled $78,000 for the year.
• Total PAYG tax withheld from Ned’s weekly wages from Acme and forwarded to the ATO amounted to $19,000.
• Additional wages paid to Ned as a Christmas bonus of $6,000 net (net of $4,200 PAYG tax withheld).
• Reimbursement of out-of-pocket travel costs of $1,200 that Ned incurred during his employment.
• A taxable travel allowance totalling $2,800. No PAYG was withheld from this amount.
• Acme paid health insurance premiums for Ned and his wife to the value of $2,750, as an employment fringe benefit.
• Superannuation contributed $10,000 to Acme Holdings Superannuation Fund on behalf of Ned.

Required:

For each of these transactions indicate which amounts are to be included in Ned’s assessable income and provide Ned’s total assessable income.

Q4

Yvette Jankic, a resident single taxpayer aged 31, worked in New Zealand from 1 July 2017 until 15 November 2017 and has provided the following information for the 2017/18 tax year:

Receipts	$
Interest (net of TFN tax withheld $490)	510
Interest from United Kingdom (net of withholding tax $300)	2,700
Dividend from the U.S. state of Georgia (net of withholding tax $2,100)	3,900
Gross salary – Australian employment (PAYG tax $5,285 withheld)	21,000
Reportable fringe benefit as per PAYG Summary	6,252
Net salary – New Zealand employment (tax withheld $2,540)	12,650
Bonus from Australian Employer for exceptional performance	2,000

Payments	$
Interest and Dividend deductions relating to United Kingdom and Georgia investments	250
Work-related deductions relating to Australian employment	300

Note – Yvette does not have private health insurance.

Required:

1. Calculate Yvette’s taxable income for the 2017/18 tax year.
2. Calculate Yvette’s net tax payable or refundable for the 2017/18 tax year.

Q5 Benita Ford, a resident taxpayer purchased a house on 30 June 2008 which she used as her main residence for 2 years until 30 June 2010. She then leased the property to tenants for 8 years until the property was sold on 30 June 2018. Benita will apply the main residence exemption for 6 years of this period.

• The house was originally purchased for $420,000.
• The market value of the property on 30 June 2009 was $475,000.
• The house was sold for $705,000.

Benita did not dispose of any other assets during the 2017/18 tax year.

Required:

Calculate Benita’s Net Capital Gain in respect of the 2017/18 tax year (after allowing for the partial main residence exemption).

Q6

(Superannuation lump sum and income stream)

On 14 August 2017, Tammy Gochi, aged 53, retired from her job as chief executive officer of Megacorp Limited to commence service as a volunteer for Whalepeace International. She received a superannuation lump sum of $160,000 which entirely comprised an element taxed in the fund. PAYG tax of $34,500 was withheld from the lump sum.

During the remainder of the 2017/18 tax year, Tammy also received a superannuation income stream benefit of $40,000 from the fund. PAYG tax of $9,780 was withheld from this amount. The entire amount was taxed in the fund.

Tammy’s only other income during the 2017/18 tax year was gross salary of $36,290 for the period up to the date of her retirement. PAYG tax of $9,035 was withheld by her employer. Tammy has private hospital insurance.

Required:

1. Calculate Tammy’s taxable income for the 2017/18 tax year.
2. Calculate Tammy’s net tax payable or refundable for the 2017/18 tax year.

Answer rating: 100% (QA)

Q1 All four persons are not liable for the Medicare Levy Surcharge as their income does not exceed t... View the full answer