SFT's tax law income (net income calculated under s95 ITAA36) for the 2020/21 income year was...

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SFT's tax law income (net income calculated under s95 ITAA36) for the 2020/21 income year was $214,000. The SFT trust deed also includes a default distribution clause which provides that: "In the event that the Trustee does not exercise the power to accumulate or to distribute all or part of the income prior to midnight on 30 June in the relevant income year, then the undistributed or unaccumulated income will automatically be distributed to beneficiaries Calli, Maalinka, Tom and Jim in equal shares." The Trustee, Fallon is in the process of preparing the Swift Family Trust (SFT) income tax return for the 2020/21 income year. Required: Advise Tom, Katie and Fallon regarding the income tax implications arising from the above facts in relation to the 2020/21 income year. In your answer include the calculation of Tom's and Katie's taxable income or tax loss for the 2020/21 year of income and make sure you refer to any relevant cases, legislative provisions, tax rulings and principles of tax law. SFT's tax law income (net income calculated under s95 ITAA36) for the 2020/21 income year was $214,000. The SFT trust deed also includes a default distribution clause which provides that: "In the event that the Trustee does not exercise the power to accumulate or to distribute all or part of the income prior to midnight on 30 June in the relevant income year, then the undistributed or unaccumulated income will automatically be distributed to beneficiaries Calli, Maalinka, Tom and Jim in equal shares." The Trustee, Fallon is in the process of preparing the Swift Family Trust (SFT) income tax return for the 2020/21 income year. Required: Advise Tom, Katie and Fallon regarding the income tax implications arising from the above facts in relation to the 2020/21 income year. In your answer include the calculation of Tom's and Katie's taxable income or tax loss for the 2020/21 year of income and make sure you refer to any relevant cases, legislative provisions, tax rulings and principles of tax law.

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Based on the default distribution clause in the SFT trust deed if the trustee Fallon does not distri... View the full answer