John Happy is a tax resident and works as an independent contractor since 1 July 2020. He

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Question:

John Happy is a tax resident and works as an independent contractor since 1 July 2020. He provides you with the following information for the purpose of preparing his income tax return for the year ended 30 June 2021:

John received $55,000 as payment from clients for electrical services he provided during the financial year 2020/2021. He also estimated that the projected fees will be $120,000 in the financial year ended 2022. John received the following distribution income from Australian resident publicly listed companies, APT and SML:

- 1/11/2020 Partly franked distribution from APT (franked to 35%) $1,500

- 25/6/2021 Unfranked distribution from SML $900

John sold the following assets to finance the purchase of a holiday house:

- John sold a building which he used as an investment property for $2,300,000 on 1 May 2021.

- He inherited the building valued at $1,500,000 on the death of his father on 20 July 2008.

- John’s father acquired the building in 1982 for $120,000.

- John sold his collection of stamps for $15,000 on 16 June 2021. He acquired this stamps on 10 October 2000 for $35,000.

- John has a carry forward capital loss of $23,000 as at 30 June 2020 from sale of marketable shares.

During the 2021 financial year, John received rental income of $45,000 from a shop which he bought four years ago. The following expenditures in relation to the shop were also incurred during the year:

- Council rates $2,360 Repairs

- Painting of the internal walls of the shop $8,500

- Built a new driveway on 1 August 2020 $55,000

- Interest on the shop mortgage (paid up to May) $13,200

- Interest on the shop mortgage (June interest is due on 10 July) $1,200

John also made the following payments during the year:

- Fee paid to a tax agent for preparing and lodging his 2019/2020 individual income tax return ($500) and for lodging an objection to an income tax assessment from a previous year ($1,000)

- General interest charge of $800 for paying his income tax late in 2018/2010

1) Advise John whether his business is required to register for GST. Please cite relevant authorities.