powerpoint%20Chapter%2003%20-%20salaries%20tax%20%28income%29

Powerpoint%20Chapter%2003%20-%20salaries%20tax%20%28income%29

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Unformatted text preview: (year 11/12) 14 th edition 1 Chapter 3 Salaries Tax : Income Key points :- 1.Basic period of assessment 2.Date of accrual 3.Relating back of lump sum 4.Income from office/employment 5.Case law 6.Benefits-in-kind 7.Share option 8.Accommodation benefit 9.DIPN 16 (year 11/12) 14 th edition 2 Basic period From 1 April of each year to 31 March the following year One single assessment for each person Refer to Example 1 and example 2 . (year 11/12) 14 th edition 3 Example 1 Year 2006/07 - 1/4/2006 to 31/3/2007 Year 2007/08 1/4/2007 to 31/3/2008 Year 2008/09 1/4/2008 to 31/3/2009 Year 2009/10 1/4/2009 to 31/3/2010 If a person has several employments and/ or office and/or pension, only one single assessment will be issued (year 11/12) 14 th edition 4 Example 2 Mr. Chan had full time employment as well as part-time employments during the year ending 31/3/2011 All his income is subject to one single assessment (year 11/12) 14 th edition 5 Accrual (I) Income accrues to a person if (a) he is entitled to claim and (b) he is deemed to have received the income BR 13/74 the taxpayer in entitled to receive a gratuity on 3 Apr 73 , the payment was cleared on 30 March 73 --- assessed in 73/74 not 72/73 In D26/07 if the taxpayer received but refunded part of the salary/allowance, then the amount refunded was NOT taxed (year 11/12) 14 th edition 6 Accrual (II) In case of bonus based on the companys profits, The bonus is accrued when the profit is ascertained In BOR 35/85 as the bonus was ascertained on 23/5/81 for the fiscal year 31/3/81, the taxable year was 1981/82 , not 80/81. (year 11/12) 14 th edition 7 Accrual (III) A person is deemed to have received the income if that income is made available to him, or dealt with on his behalf, or dealt with according to his direction. ( Special case ) If a sum is paid after his employment has ceased --- it is deemed to have accrued to him on the last date of employment . ( Example 3 ) (year 11/12) 14 th edition 8 Example 3 Mr. Chan left from LM ltd on 31/3/year 1 . On April 5 year 2 he received a bonus of $12,000 FOR the year end 31/12/year 1. The bonus was deemed to accrue to the taxpayer on 31/3/year 1, last day of employment (year 11/12) 14 th edition 9 Lump sums received A lump sum payment paid upon termination of an office or employment, or A lump sum payment of deferred pay Can be spread back under S. 11D The application must be made in writing within 2 years Refer to example 4 and example 5 . (year 11/12) 14 th edition 10 Example 4...
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Powerpoint%20Chapter%2003%20-%20salaries%20tax%20%28income%29

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