Reference no: EM132804542

Question - The Nguyen Family Trust is a discretionary trust created by Peter Nguyen (the trustee) in 2015 for the benefit of his children and grandchildren. Peter has the discretion to distribute income to the beneficiaries as he wishes. The income of the trust during the financial year ended 30 June 2020 was as follows: -

- Rental income(net) $25,000

- Dividends received from BKF Ltd $30,000

- Dividends received from PHX Ltd $7,000

- Interest from Australian sources $4,300

- Interest from USA sources (after tax of $1,000 was withheld) $5,600

- Profit on disposal of land $20,000

Other information

- The land was acquired on 1 May 1989 for $46,000. Acquisition costs amounted to $2,300. The land was sold on 1 May 2020 for $70,700. Advertising and agent's commission cost $2,400.

- The dividend from BKF Ltd was franked to 60%

- The dividend from PHX Ltd was franked to 80%

The trustee exercised his discretion to distribute the net income amongst the beneficiaries as follows for the year ended 30 June 2020: -

- 40% to Jane Nguyen(resident), aged 65 (no other income).

- 20% to Tom Nguyen(resident), aged 16 (at school, no other income).

- 30% to Anne Nguyen, aged 45 who lives in Singapore since the year 2000.

- 10% of net income will be distributed in the year 2021.

REQUIRED -

a) CALCULATE the net income of the Nguyen Family Trust for the year ended 30 June 2020. You MUST show workings.

b) EXPLAIN the tax implications for Jane, Tom, Anne and the trustee. You MUST also provide specific legislative references.