Question 1

Trevor is a resident of Australia and who owns 1.000 shares in BBC Bank and during the 2020 tax year the Bank paid him a total of $1,400 in fully franked cash dividends. In light of these facts, which of the following is true?

Accepted Answer

A)  Trevor will need to include both the $1,400 dividend and the $600 franking credit into his assessable income 
B)  Trevor only needs to include the $1,400 cash franked dividend received into his assessable income as he did not physically receive the franking credit 
C)  As a resident, Trevor does not include the franking credit into his assessable income 
D)  The $600 franking credit is taken off the assessable income amount and so Trevor only needs to include $800 into his assessable income

Question 2

Saif is a non-resident of Australia and he has received a fully franked dividend of $700, which has a $300 franking credit and also a partially franked dividend of $1,400, franked to 80%, from Quarry Bank. What is the amount of the franking tax offset that Saif is entitled to?

Accepted Answer

A)  $780 
B)  $480 
C)  $300 
D)  $0

Question 3

Dennis purchased a property in Adelaide in April 2010 for $400,000. Dennis lived in that property until 2012 at which time he moved interstate for work and rented out the property. The property remained rented until April 2019 at which time Dennis returned to live in the property. Dennis then sold the property in April 2020 for $560,000. Does Dennis have any CGT liability on the sale of this property?

Accepted Answer

A)  $56,000 
B)  $112,000 
C)  $160,000 
D)  $0

Question 4

Which of the following is not true about a genuine early redundancy payment?

Accepted Answer

A)  The employee must be dismissed before they reach 65 years of age 
B)  The payment represents what would be payable under a normal commercial arrangement 
C)  A genuine redundancy is not an ETP (eligible termination payment) but rather consists of a tax-free amount up to a certain threshold that is non-assessable non-exempt income. 
D)  There is an arrangement or agreement at the time of dismissal that the employee be re-employed by the employer6 months after the redundancy payment is made

Exam 10: Taxation of Individuals

Trevor is a resident of Australia and who owns 1.000 shares in BBC Bank and during the 2020 tax year the Bank paid him a total of $1,400 in fully franked cash dividends. In light of these facts, which of the following is true?

Saif is a non-resident of Australia and he has received a fully franked dividend of $700, which has a $300 franking credit and also a partially franked dividend of $1,400, franked to 80%, from Quarry Bank. What is the amount of the franking tax offset that Saif is entitled to?

Which of the following is not true about a genuine early redundancy payment?