Question

Max Lowe is a 37 year old Australian resident for income tax purposes. Max has two children with his spouse, Lara (33 years old) - Craig (aged 3 years) and Troy (aged 1 year old).   Lara’s 2019 taxable income is comprised solely of $12,300 in gross salary she received from part-time employment.

On October 15, 2018 Max resigned from his position as a Senior Lecturer in Marine Biology at the University of Newcastle, NSW.   On leaving the University Max was successful in obtaining employment as a Marine Biologist with the Australian government science organisation (CSIRO) based in Cairns, Queensland. He and his family moved permanently to Cairns to commence his employment on 1 November, 2018. Max is also the sole owner of a Sydney rental property that was tenanted for the whole year.

Details of Max’s receipts and payments for the year ended 30 June 2019 are as follows (all amounts are inclusive of GST where applicable):

Receipts

Gross Salary - University of Newcastle note 1                            $32,750

Gross Salary – CSIRO note 2                                                           $88,000

Received Fully Franked Dividend (ASX Listed)                     $3,500

Received Unfranked Dividend                            $1,300

Gross Rental Property Income                             $10,400

Net Interest Income from New Zealand note 3                            $1,800

Payments made by Max

Airfares and accommodation costs relating

   to the initial job interview with CSIRO                      $1,860

Annual subscription Australian Marine Biology Society                  $700

Purchase of equipment note 4                                                    $4,399

Expenses relating to the rental property (all deductible)         $17,100

Other amounts – all deductible under s8-1                        $1,500

Deductible Superannuation Contribution paid                 

    to Max’ Superannuation Fund note 5                                   $3,500

Superannuation Contribution paid to Lara’s

    Superannuation Fund note 5                                                      $4,500

Other information:

1. Max does NOT have private hospital insurance cover for either himself or his family.
2. At 30 June 2019 Max had a HELP (HECs) debt of $7,200 relating to an Ancient History degree he completed for personal interest purposes in 2016 at the University of NSW.  

Notes:

1. Max’s 2019 Payment Summary from the University of Newcastle also showed the following details:

PAYG Tax Deducted                                       $10,000

Reportable Fringe Benefits                             $3,700

2. Max’s 2019 Payment Summary from the CSIRO also showed the following      details:

PAYG Tax Deducted                                       $28,000

Reportable Fringe Benefits                                $3,200

Reportable Employer Superannuation Contributions      $5,900

3. The NZ gross interest was $2,000 (AUD equivalent) with $200 AUD tax deducted by the NZ taxation authorities.

4. During the year Max acquired the following equipment:

1/8/18     Computer $3,200 effective life 5 years (used 80% for business)

      1/05/19 Microscope $910 effective life 10 years (used 100% for business)

      1/06/19    Binoculars $289 effective life 3 years (used 100% for business)

       

5. On the 20 June 2019 Max paid $3,500 from his after tax salary to his superannuation fund and advised the fund this was a concessional superannuation contribution. On the same day he also paid $4,500 to Lara’s superannuation fund, on her behalf, and advised her superannuation fund this was not a concessional contribution. The only other concessional contributions received by Max’s fund for the year were the Reportable Employer Superannuation Contributions ($5,900) and Superannuation Guarantee contributions from both employers.

Required

Calculate Max’s minimum taxable income and net tax payable/refundable for the year ended 30 June 2019.

Answer 1

Reportable Fringe Benefit	$6900
Reportable Employer Superannuation Contributions	$ 5,900
Received Unfranked Dividend	$1,300
Net Interest Income from New Zealand note 3	$1,800
Gross Rental Property Income	$10,400
Superannuation Contribution paid to Lara’s	$4,500
	$24900
Concession
HELP (HECs) debt of $7,200	$7200
Superannuation Contribution paid to Max	$3,500
Airfares and accommodation costs relating
to the initial job interview with CSIRO	$1860
Annual subscription Australian Marine Biology Society	$700
Purchase of equipment note 4	$3,999
Expenses relating to the rental property (all deductible)	$17,100
Other amounts – all deductible under s8-1	$1,500
	$35,859
Max Minimum Taxable Income Hence Max Minimum Taxable income is $-10959 and Next tax refundable to him will be $ 10959	$-10,959