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1) In relation to the rates of tax applicable to taxpayers, which of the following statements is most correct?

a. All resident taxpayers have a tax-free threshold of $18,200 for the income year ended 30 June 2021.

b. Resident and foreign resident (non-resident) individual taxpayers have a tax-free threshold.

c. Income averaging is available to all taxpayers, not just primary producers and artists.

d. The resident rates of tax will apply to a person who is a foreign resident (non-resident) at the end of the income year if they were a resident of Australia at any time during the year.

e. Resident taxpayers pay tax at regressive rates on their taxable income.

2) Oscar severely injured his spine in a motorcycle accident which resulted in him becoming a paraplegic. As a result he consulted a lawyer and was successful in obtaining a compensation payout of $300,000 from his insurance company. In addition to the lump sum payment, Oscar received pre-judgment interest of $40,000. The insurance company appealed the decision in a higher court, however the original decision was confirmed and a further $10,000 of interest was awarded by the court. The insurance company therefore paid Oscar an amount of $350,000 immediately following the final decision. What amount should Oscar include in his assessable income as a result of these receipts?

a. $300,000

b. $50,000

c. $350,000

d. $340,000

e. Nil

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