TA2 - BUSI 0018 Hong Kong Taxation Tutorial Questions Unit...

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TA_U2_Property_0809 1 BUSI 0018 – Hong Kong Taxation Tutorial Questions Unit 2 – Property Tax Answer 4 (a) s.5(1), IRO – general charging section - property tax is charged for each year of assessment on every person being the owner of any land or buildings or land and buildings wherever situated in HK - it is computed at the standard rate on the net assessable value of such land or buildings or land and buildings for each year of assessment - special note o *property tax is charged on owners o i.e. income received from sub-letting Æ NOT subject to property tax but assessable under profits tax o *for property tax purpose Æ the party who entitles to receiving the rent will be charged to Property Tax ( DIPN No. 14, para 7 ) (b) Y/A 2005/06: Property tax liability = Nil; because the rental income started in June 2006, i.e. Y/A 2006/07. Y/A 2006/07: Property Tax Liability for Miss Chan $ Rent ($15,000 x 10) 150,000 Premium ($225,000 x 10/24) 93,750 Management fee ($1,900 x 10) 19,000 262,750 Less: 20% statutory deduction 52,550 Net assessable value 210,200 Tax at 16% 33,632 Notes: (a) Rates paid by tenant is neither an assessable value nor an eligible deduction for Miss Chan. (b) Bank mortgage interest is not an eligible deduction for property tax purposes. Y/A 2007/08 $ Rent ($15,000 x 2 + $16,500 x 10) 195,000 Premium ($225,000 x 12/24) 112,500 Management fee ($1,900 x 12) 22,800 330,300 Less: 20% statutory deduction 66,060 Net assessable value 264,240 Tax at 16% 42,278 Notes for Y/A 2006/07 are also applicable.
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TA_U2_Property_0809 2 Answer 5 Property Tax Liability of Mr. Mo
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This note was uploaded on 04/07/2012 for the course TAX 101 taught by Professor Ng during the Spring '12 term at HKU.

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TA2 - BUSI 0018 Hong Kong Taxation Tutorial Questions Unit...

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