a. State the time limit and the procedures for making a valid election for personal assessment as specified under the Inland Revenue Ordinance. b. Mr Chan is an accounting manager of an investment company.

During the year ended 31 March 2020, his income and expenses are as follows: Income:

1) Salary: $800,000

2) Bonus: $162,000

3) Home purchase allowance: $120,000

4) Dividend from private company: $11,000

5) Bank interest: $50,000

Expenses:

1) Cash donations to Po Leung Kuk $50,000

2) Mortgage interest paid to Hang Seng Bank in respect of his place of residence $180,000

3) Annual subscription to (i) Hong Kong Institute of Certified Public Accountants $2,100 (ii) ACCA $1,450

4) Fees for attending a professional accountant course organized by the City University of Hong Kong $4,000

5) Cash given to his father who is aged 62 $30,000

6) Cash given to his mother who is aged 53 $25,000

7) Cash given his father-in-law who is aged 65 $10,000

8) Fees paid to recognized residential care home which provided residential care to his grandmother who is aged 85 $48,000

9) Mandatory contributions to MPF scheme $12,000

Mr Chan is married. He and his wife are living with his parents. The couple have a child who is under 18 years old. Mrs Chan is the sole proprietress of a florist shop and partner in a beauty centre.

The results of the businesses for the year of assessment 2019/20 are as follows:

(a) Sole proprietress business: Assessable profit of $180,000 (after deduction of approved charitable donations of $45,000)

(b) Partnership business: Share of agreed partnership loss of $190,000

You have also been supplied with the following information for Mrs Chan for the year ended 31 March 2020

(a) Rental income of her solely owned property (rates and management fees paid by tenant) $96,000

(b) Mortgage interest paid to Hong Kong Bank in respect of the loan to finance the purchase of the rented property $30,000

(c) Mortgage interest paid to Bank of China in respect of her other property occupied by her parents $50,000

(d) Cash donations to the Hong Kong Community Chest (other than those allowed under profits tax) $25,000

Other information:

(a) Mr and Mrs Chan have elected for personal assessment for the year of assessment 2019/20.

(b) Mrs Chan has a loss brought forward of $200,000 under personal assessment from previous years.

(c) Mr Chan and Mrs Chan have paid the following taxes for the year of assessment 2019/20: Mr Chan: Salaries tax $104,780 Mrs Chan:Profits tax $28,800 Property tax $12,288

Required:

(i) Compute the net assessable income before concessionary deductions of Mr Chan for the year of assessment 2019/20.

(ii) Compute the tax payable by or tax refundable to Mr and Mrs Chan under personal assessment for the year of assessment 2019/20, assuming that they have elected for personal assessment on a joint basis. You are required to show your workings on the computation of approved charitable donations allowed under personal assessment.