You are a financial adviser and the following information is an extract of data you gathered as part of fact-finding during an initial client consultation for married couple Jacinda (aged 38) and Steven (aged 40) Oldham. Jacinda has opted for a part-time teaching assignment with the local school for the last 3 years. Three years ago, she took a career break from her full-time teaching career given growing children. Steven works as a Senior Clinical Nurse Consultant at a local government hospital. They have two children who are aged 12 and 14.

• The couple would like to know how much money they will receive after paying tax for the year ended 30th June 2020. They would like advice on how to reduce their tax liability in the future.

• The Oldham's have invested over the years in shares of several banks. They have come to you understand how they should invest in the future. Part of this investment is for the higher education of the children. The balance is to buy a property in the country for the postretirement phase.

• The Oldham's life goal has been to buy a property in the country and live a quiet life 20 years from now. They have come to you see if they can achieve this goal.

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Current Assets and Liabilities Assets (Ownership) Current Liability Current valuation $ (Ownership) valuation $ Home and Contents (Joint) 720,000 Credit cards (Joint) 6,000 Car (Joint) 35,000 Includes the annual NAB Joint Savings bank Account 8,000 interest cost Investments: (Steven) Car loan (Joint) 30,000 NAB bank Shares 72,000 5-year term at 12% ANZ bank Shares 120,000 Macquarie Group Shares 220,000 Superannuateon- (Jacinda) 225,000 Superannuateon- (Steven) 450,000 Steven's Superannuateon asset allocation Investment Asset Allocation Performance p.a. after tax Australian Shares 45% 4% Cash & Fixed Interest 20% 1.4% International Shares 25% 10.80% Property 10% 3.10%

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Travelling to and from work- $2,500 (Steven) and $600 (Jacinda)

• Donations to registered Charity $2,000 (Jacinda)

• Teacher Union Membership (Jacinda).........$1,000

Required: 1. Calculate Jacinda's and Steven's after-tax income for the year ended June 30th, 2020. For calculation, assume the figures are of the year 2019-20.

Explain how Jacinda and Steven could reduce their tax liability by splitting their income. Show the effect (calculation) this strategy would have had, if they had split income for the tax year ended 30 June 2020.