7 As the Superannuation fund ($ 400,000) of Mary made-up of a tax-free component of $ 200,000, only the remaining $ 200,000 is taxable. Taxability on Superannuation arises when it is being received. Since Mary, retires and receives the amount ($ 400,000) the taxability arises, but only on $ 200,000 which is taxable. Hence 15% tax on $ 200,000 shall be the taxable amount, which is equal to $ 30,000.

9 

According to the taxation laws for Trust, a trust or beneficiary is taxed depending on whether the beneficiary is presently entitled to get a share of the trust income and whether he is under a legal disability.

If a beneficiary is not entitled to get a share of the trust income then the trustee is taxed on that income at the highest Marginal tax rate.

However, if a beneficiary is entitled to get a share of the trust income but under a legal disability the trustee will pay tax on behalf of the beneficiary at marginal tax rates.

Conclusion

Based on above provisions since the beneficiary is entitled to get a share of the trust income but under a legal disability therefore the trustee will pay tax on behalf of the beneficiary at marginal tax rates.

Therefore OPTION B IS CORRECT.

Reasons for Other options are as follows:

Option A: Trustee pays the tax at the highest marginal rate - This provision will be applicable only if beneficiary is not entitled but in the question it is given that beneficiary is entitled to get a share of the trust income therefore this option is not true.

Option C: Beneficiary pays the tax at the highest marginal rate - Since the beneficiary is under a legal disability in the question therefore he will never be personally liable for tax therefore this option is not true.

Option D: Beneficiary pays the tax at marginal rates - Since the beneficiary is under a legal disability in the question therefore he will never be personally liable for tax therefore this option is not true.