Question

Q1) (Foreign Pension)

Elizabeth Windsor is 59 years old. She is a resident taxpayer with private health insurance. She also received a government pension from the United Kingdom that is taxable in Australia but not in the United Kingdom. Elizabeth is subject to tax as an Australian resident taxpayer but exempt from tax in the United Kingdom.

During the 2017/18 tax year, Elizabeth derived interest and unfranked dividends of $39,000 and also received $25,000 of pension.

Required:

Calculate Elizabeth’s taxable income for the 2017/18 tax year.

Calculate Elizabeth’s tax payable or refundable for the 2017/18 tax year

Q2) Stan Eckhardt, aged 57, received a superannuation lump sum of $310,000 from his superannuation fund upon retirement on 15 April 2018. PAYG tax of $28,170 was withheld from the lump sum. The lump sum comprised entirely of an element taxed in the fund. Stan also received gross wages of $85,000 up to the date of his retirement. PAYG tax of $22,110 was withheld from Stan’s wages. Stan has adequate private health insurance.

Answer 1

Answer:

Answer-1(a):
Unfranked dividends	39,000
UK Pension	25,000
Total Taxable income	64,000
Answer-1(b):
Total Taxable income	64,000
Tax on taxable income	12,347
Medicare levy	1,280
Total tax payable	13,627
Less: Low income off-set	40
Net tax payable	13,587
*Low income off-set = 445 - (64,000 - 37,000)*.015
= 445 - 405 = 40