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5 . Miss Cheung, the accountant of Beautiful Clothing Ltd , concluded a rental agreement to lease her apartment to Mr . Williams, an expatriate,

5. Miss Cheung, the accountant of Beautiful Clothing Ltd, concluded a rental agreement to lease her
apartment to Mr. Williams, an expatriate, on 1 January 2017 for a term of three years at a monthly
rent of HK$20,000. Government rates (HK$1,500 per quarter after concessions) were paid by Miss
Cheung. From 1 February 2018, Mr. Williams did not pay any rent. He then moved out of the
property on 31 May 2018 and was untraceable. The property was then let to Mr. Jenkins, another
expatriate, on 1 July 2018 for a term of 2.5 years under the following terms:
Lump sum payment: HK$50,000;
Monthly rent: HK$25,000;
Rent deposit: HK$50,000;
Management fee: HK$2,000 per month payable by landlord; and
Government rates: HK$1,500 per quarter payable, after concessions, by landlord.
It was agreed by the IRD assessor that the rent owed by Mr. Williams was irrecoverable after he
had moved out from the property in May 2018.
Required:
Compute the property tax liabilities of Miss Cheung for the year of assessment, assuming that all
the government rates paid by landlord is deductible (20 points)
2018/19. Ignore provisional property tax.

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