Reference no: EM132863283
Questions -
Q1. Dominic owns a property in Sai Kung which was let under the following terms:
I. Term: 1 January 2020 to 31 December 2020.
II. Rental deposit: $16,000.
III. Monthly rent: $8,000.
IV. Rates: $1,000 per quarter payable by the tenant.
V. Management fee: $800 per month payable by the tenant.
The tenant paid rent on schedule only up to June 2020, but he continued to live in the property until December 2020. Dominic repossessed the property and applied the rental deposit against the outstanding rent. The property was let again in February 2021 at a monthly rent of $3,000.What is the net assessable value of the property for the year of assessment 2020/21?
a. $40,000
b. $50,000
c. $24,000
d. $36,800
Q2. Mezzo was promoted as Finance Director of a Hong Kong listed company in April 2020. As a senior member of staff, she was given 1.5 million share options at an exercise price of $0.20 per share exercisable within two years from 1 April 2020. The shares were trading at $0.50 on that date.
The share price of the company surged recently to $1.20 per share, at which time Mezzo exercised half of the options. Her stockbroker sold the shares at an average price of $1.00 per share. How much will be included as her assessable income in respect of the share options for the year of assessment 2020/21?
a. $750,000
b. $1,500,000
c. $600,000
d. $450,000
Q3. Mr Yeung owns a property in Hong Kong and let it to Mr Mo at a monthly rent of $15,000. Rates of $600 per quarter was payable by Mr Yeung. Starting from February 2020, Mr Mo did not pay any rent to Mr Yeung and Mr Mo moved out from the property on 30 June 2020. It was accepted that the rent owed by Mr Mo was irrecoverable when he moved out from the property.
The property was let to Mr Yu at a monthly rent of $13,000 starting from 1 February 2021. Rates of $500 per quarter was payable by Mr Yu. Amount of irrecoverable rent carried backward to the year of assessment 2019/20 is:
a. $4,000
b. $6,400
c. $3,000
d. $4,600
Q4. Mr. Johnson Lee occupied an office for business purpose during the year of assessment 2020/21. His father owned the property and did not charge any rent. One of Johnson's friends approached him and asked to share a room for business purpose. His friend agreed to pay him $1,000 a month. Who should be liable to pay tax?
a. Income received by Mr. Johnson Lee should be subject to profits tax.
b. Mr. Johnson Lee should be liable to property tax.
c. Both Mr. Johnson Lee and his father would not be liable to property tax.
d. Mr. Johnson Lee's father should be liable to property tax.
Q5. Mr. Wong rented a property to Mr. Chan for a term of two years at a monthly rental of $10,000 starting 1 April 2020. On 31 December 2020, Mr. Chan informed Mr. Wong that he had lost his job and asked Mr. Wong to reduce to rent to $7,000 a month with effect from 1 January 2021. If Mr. Wong wanted to apply for holding over the payment of provisional tax, which of the following is correct?
a. He should lodge a written application for holding over the payment of provisional property tax no later than 28 days before the due date, or 14 days after the date of the notice for payment of provisional property tax.
b. He should lodge a written application for holding over the payment of provisional property tax no later than one month before the due date, or one month after the date of the notice for payment of provisional property tax.
c. He should lodge a written application for holding over the payment of provisional property tax no later than one month before the due date, or 14 days after the date of the notice of payment of provisional property tax.
d. He should lodge a written application for holding over the payment of provisional property tax no later than 28 days before the due date, or one month after the date of the notice for payment of provisional property tax.