Reference no: EM133266586

Eric works full time as a scientist and is 21 years of age. In his spare time, he develops apps for start-up companies with his brother, Oliver. Oliver and Eric started developing apps in their spare time whilst they were at university, and it has become profitable. In 2018, the brothers formed a partnership, through which they operate the business 'Pinnacle Development'. Eric is also a beneficiary of the Smith Family Trust, which was established by his late father many years ago.

Eric has come to you to prepare his tax return for the 2021/22 income tax year. He has provided you with the following information

Receipts:

- Salary from employment as a scientist: $120,000

- Fully franked dividend from ABC Pty Ltd of $2,000. ABC is a resident entity that is not a base rate entity.

- Partially franked dividend from YZT Pty Ltd of $3,000. YZT is a resident entity that is not a base rate entity. The dividend was franked to 30%.

- $14,000 from the sale of an antique watch that was left to him by his father when he died. His father acquired the watch in 1976 for $100. At the time Eric inherited the watch (in 2010) it was valued at $10,500.

- Distribution of $15,000 from the Smith Family Trust

Expenses:

- Work related travel expenses: $5,000

Partnership details (the figures do not include GST)

Eric and Oliver are equal partners in Pinnacle Development. However, according to the partnership agreement, Eric is to receive a predetermined 'salary' of $30,000 per annum for managing the business. Oliver is not entitled to any partner's salary. Eric has provided you with a summary of the profit and loss statement for the partnership for the year ended 2022.

Revenue:                                                         $120,000

Less: Expenses (all tax deductible)                ($40,000)

Less: Partners salary - Eric                            ($30,000)

Accounting profit of the p'ship                       $50,000

Additional information:

- Eric is single and has private hospital cover and has claimed the private health insurance rebate through his private health insurance provider.  

Required:

(a) Calculate Eric's net tax payable for the 2021/22 income tax year

(b) Advise Eric whether Pinnacle Development is required to register for GST.