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Sample Individual Tax Computation
Taxation Law (Victoria University)
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Sample Individual Tax Computation
Background
Peter Anderson is a Legal consultant residing in Melbourne. He provides services to both Australian
and Foreign clients. Peter’s income consist of domestic and foreign income alike. During the year of
assessment 20/21, Peter sold an investment property which had been held for more than 12 months
and realised a capital gain. There were no net capital losses carried forward from prior years. Prior to
disposal, Peter derived rental income from the property, and incurred interest costs in connection with
borrowings to acquire the property.
Moreover, Peter has full private patient hospital cover for the entire year of assessment and therefore,
is not liable for the Medicare levy surcharge.
Tax calculation
AUD
Assessable income
Gross salary
110,000
Australian sourced rental income
11,700
Australian sourced interest income
500
Australian sourced dividend income:
Fully franked (net)
700
Gross up for franking credits (700 x 30/70)
300
Foreign sourced dividend income (gross of WHT of AUD 200)
2,000
Net capital gain on disposal of property:
Proceeds
180,000
Cost base
(150,000)
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1,000
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Gross capital gain (proceeds less cost base)
50% CGT discount
30,000
(15,000)
Total assessable income
15,000
140,200
Allowable deductions
Protective clothing
(300)
Interest and repairs on investment property
Charitable contributions
(5,250)
(150)
Total allowable deductions
Total taxable income
(5,700)
134,500
Tax on taxable income (20,797 + 37% x 44,500)
37,262
Medicare levy (134,500 x 2%)
2,690
Foreign income tax offset
(200)
Franking credit
(300)
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Total tax payable
39,452
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