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DT1 (a special purpose trust) is entitled to an amount of $10,000 from the net income of the Business Unit Trust 2. The net income of DT1 is $10,000 3. DT2 (an investment trust) is entitled to an amount of $10,000 from the net income of DT1. 4. The trustee of DT 1 makes a loan of $5,000 to Mrs Smith, shareholder of Smith Pty Ltd. 5. The net income of DT2 is $30,000 comprising dividend income of $20,000 and the distribution from DT1 of $10,000. 6. The trustee of DT2 resolves to distribute (but does not pay) all of the dividend income and $2,000 of the other income (that is, the distribution of income received from DT1) to Smith Pty Ltd, with the balance of $8,000 to Mr Smith.
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