2012 Unit 5 Profit computation - s

61 an anti avoidance provision was s61 invoked and

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Unformatted text preview: ed not 44 Con’t BoR distinguished the case from Sharkey v. Wernher BoR Sharkey pointing out that the taxpayer had not put up the properties for sale or undertaken any property trading activities. The notional profit was held not taxable as there The notional was no legislation to tax a person's intention. no CIR appealed to the HC. 45 CIR v Quitsubdue Limited (1999) HC found that the original intention of T should be HC original for long-term investment long-term HC considered that : Sharkey v Wernher did not apply to HK because a not person could not trade with himself & therefore person could not make a profit out of trading with himself & himself The charge on profits in s.14 was a charge on real The profit. profit. 46 IRD’s View CIR has not appealed. CIR, in a meeting with HKSA in 2000, CIR, said that IRD still considered the principle of Sharkey v Wernher applied in HK in 47 Recent Development of the Recent Sharkey v Wernher principle Sharkey In D75/96, the taxpayer had purchased a In D75/96 the few properties and later developed them into a commercial building which was put up for letting. The notional profit arising notional from the alleged change in intention was assessed to profits tax. 48 Computation Pro Forma of Profit Tax 49 Computation Pro Forma of Profit Tax Con’t Con’t Computation 35% 16.5% 15% 50 Conclusion Profits tax rates Profits tax rates When does profit accrue When does profit accrue Valuation of stock Valuation of stock Sharkey v Wernher principle Sharkey v Wernher principle Computation of profits tax Computation of profits tax 51...
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