During the year ended 31 March 2022, Ms Lam owned a building in Hong Kong comprising 10 flats. Eight of these flats were leased out (total rental income for the year amounted to $400,000). The remaining two flats were not yet rented out. Under the terms of the leases, the tenants pay the rates (total amount for the year was $20,000). The tenants also pay Ms Lam a separate management fee for cleaning and provision of facilities (total amount for the year was $120,000). During the year, severe storms caused substantial damage to the flats and the total amount paid by Ms Lam for repairs was $30,000. Ms Lam has taken out a mortgage with the Bank of China to finance the acquisition of the block of flats (total interest expense for the year was $50,000).

Prepare the Property Tax assessments (show all steps line by line) for Ms Lam for the year of assessment 2021/2022. The standard rate for the year of assessment was 15%. Show workings in your calculations.

Furthermore, do you recommend Ms Lam to provide the management services by herself like at present, or do you recommend her to engage an independent management company to handle the property management? Why or why not? The assumption is that the rent for the tenants cannot increase and they pay the management fee directly to the property management company