LAW6300.TutorialPaper.No.10.1.2017.Suggested Answers.docx

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TUTORIAL PAPER NO. 10 – Suggested Answers 1/2017 QUESTION 1 On 1 January 2016, Norman Badlip created the Caxton Family Trust for the benefit of: i his wife, Maya (aged 58 years old in 2017); ii his daughter, Bee (aged 15 years old and a full-time student in 2017); iii his son, Alex (aged 17 years old in 2017); iv his brother, Tom (aged 48 years old and an undischarged bankrupt in 2017); and v Nation Pty Ltd. (of which Norman is the sole shareholder and director). Under the terms of the Trust, he appointed Apex Pty Ltd. (of which he is the sole shareholder and director) 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 2017, the Trustee received the following amounts for the Trust: $ 1. Net Rental Income 90,000 (after all allowable deductions) 2. Interest 20,000 (from a fixed deposit account) No other expense was incurred. For the year ended 30 June 2017, the Trustee distributed the net income of the Trust to the beneficiaries in the following manner: (i) Maya 20% (ii) Bee 20% (iii) Alex 10% (iv)
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