Trust Estate

Question 1

The Luke Family Trust is a discretionary trust pursuant to which the family’s solicitor settled $1 on Neal Pty Ltd as trustee for the trust. Mr Luke then gifted a number of properties located both in Australia and the Cayman Islands to the trust.
For the last tax year the trust has derived net income of $50,000 in rental profits, $25,000 of which was sourced from the overseas properties (and not taxed there as there is no income tax in the Cayman Islands).
The trustee determines to allocate the net income of $50,000 as follows:

•  $10,000 to Mr Luke who is a resident of Australia (and who has no other
  income);
•  $25,000 to his wife Pauline who resides in the Cayman Islands; and
•  $416 to their 15 year old daughter Jane; and
•  $5,000 applied to pay for their 18 year old insane son’s (Frank) medical
  expenses (Frank also receives $20,000 pa from another trust).

The trustee retains the balance for reinvestment.
Who is assessable on the income of the trust estate? Indicate, where relevant, any entitlement to credits.
[7 marks]

Question 2
Bruce received a $100,000 bona fide redundancy payment in 2017/18 after 10 years and 11 months service with the same employer. How will the payment be taxed?
[2 marks]