QUESTION 1 On 1 January 2016, Malcolm Caxton created the Caxton Family Trust for the benefit of: (i) his step daughter, Maya (aged 45 years old in 2018 and single); (ii) his daughter, Bee (aged 15

QUESTION 1

On 1 January 2016, Malcolm Caxton created the Caxton Family Trust for the benefit of:

(i) his step daughter, Maya (aged 45 years old in 2018 and single);

(ii) his daughter, Bee (aged 15 years old and a full-time student in 2018);

(iii) his son, Alex (aged 17 years old in 2018); 

(iiii) his brother, Tom (aged 48 years old and an undischarged bankrupt in 2018); and

(v) Nation Pty Ltd. (of which Norman is the sole shareholder and director).

Under the terms of the Trust, he appointed Comex Pty Ltd (of which he is the sole shareholder and director) as the Trustee of the Trust. It is also a term of the Trust that the Trustee has absolute discretion as to how the income and capital of the Trust are to be distributed to the beneficiaries.

For the year ended 30 June 2018, the Trustee received the following amounts for the Trust:

​

1.​Income from Trust’s business​$91,970 (after all allowable deductions)

2. ​Net Rental Income​​$40,000 (after all allowable deductions)

3.​Interest​​$20,000 (from a fixed deposit account)

No other expense was incurred.  

​

For the year ended 30 June 2018, the Trustee made the following distribution to the beneficiaries:

​(i)​Maya ​​​$20,000

(ii)​Bee ​$23,224

(iii)​Alex​​$30,000

(iv)​Tom​$35,000

(v)​Nation Pty Ltd​$33,000

For the year ended 30 June 2018:

(i)​Maya received a partly franked dividend (at 15%) of $15,000 from ​Futuris Ltd.

(ii)​Bee received no other income.

(iii)​On 25 June 2018, Alex commenced working full time as a storekeeper at Woolworths as its employee. As at 30 June 2018, he has not received any salary from Woolworths.

(iv)​Tom received no other income.

(v)​Nation Pty Ltd sold shares in an Australian public company for $50,000 on 29 June 2018. The shares were bought for $20,000 on 1 January 2013.

Advice each of Comex Pty Ltd, Maya, Bee, Alex, Tom and Nation Pty Ltd of theirrespective liability to tax for the year ended 30 June 2018.​

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