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Trust Tax calculations

  • a beneficiary is presently entitled (under s.95A(2) ITAA36) but is under a legal disability then under s.98(1) & (2) ITAA36 respectively, the trustee is assessed on the share of NTI income on behalf of the beneficiary at ordinary rates of tax





  • income to which no beneficiary is presently entitled the trustee is assessed under s.99A ITAA36 at a special penalty flat rate of 45% for 2006/07.



  • FCT may exercise his discretion and assess the trustee under s.99 ITAA36 at ordinary rates of tax

Problems and solutions

  1. A deceased estate distributes $21700 of Trust Net Income to a 15 year old beneficiary. How much will be payable by the Trustee?

    Tax on $21,700 ($21700 - $6000 x .15) $ 2355
    Plus Medicare Levy $21700 x .015 $325.50
    Less Low Income Offset ($600)

    Tax payable by Trustee $2080.50

  2. An inter vivos trust distributes $18,000 of trust income for which there is no present entitlement. How much will be payable by the Trustee?

    Tax on $18000 ($18000 x .45) $8100
    Plus Medicare Levy ($18000 x .015) $270

    Tax payable by Trustee $8370

  3. A deceased estate has $15000 of trust net income for which there is no present entitlement. How much will be payable by the trustee under the assessment received as a result of Section 99 if the deceased died over 3 years earlier?

    Tax on $15000 (15000 x .15) $2250

    Tax payable by Trustee $2250

  4. A deceased estate derived net income of $25,000. The will provided that trust income was to be distributed as follows:

    Suzanne (his wife) 50% of any income
    Phoebe (his 21 year old daughter) 15% of any income
    Steven ( his 18 year old son currently in prison) 15% of any income
    Kevin ( his 16 year old son) 15% of any income.
    The balance is to be distributed at the discretion of the trustee.

    Beneficiary Present Entitlement Legal Disability Who assessed Section Applicable Amount
    Suzanne Y N Suzanne 97 12,500
    Phoebe Y N Phoebe 97 3750
    Steven Y Y Trustee 98 3750
    Kevin Y Y Trustee 98 3750
    Balance N N/A Trustee 99 1250
    25000