Hong Kong Tax; Check final figure: Assessable income: $712,850

Anson Lam was employed as the production manager of Tango Garment Ltd (TGL), a company which carries on garment manufacturing and trading business in Hong Kong. Ansons employment contract was negotiated and signed with a director of TGL in Shenzhen, China. His salary was paid into his bank account maintained with the Mongkok branch of Bank of China (Hong Kong). He provided you with the following information relating to the year ended 31 March 2020:

1. Ansons monthly salary is $40,000. He is mainly responsible for overseeing the production of TGLs factory in Zhuhai, China. He stations in the China factory and comes back to Hong Kong every Saturday afternoon to stay with his family. He would discuss with the supervisor of the Hong Kongs factory for the production schedule in the morning of the following Monday before going back to Zhuhai. The supervisor would call Anson for instruction whenever there are any special matters arising which he could not handle himself.

2. Anson purchased a property in Shatin for $5,000,000 and used it as his place of residence starting from 1 April 2019. Anson and TGL entered into a written tenancy agreement under which TGL rented the Shatin property at a monthly rent of $10,000 for a term of two years. TGL then provided this property to Anson rent-free except that Anson was required to pay rates, Government rent and building management fee of the property which amount to $24,000 for the year. He also paid interest expenses of $105,000 during the year on a loan borrowed to finance the purchase of the property.

3. Anson was enrolled in the companys medical insurance policy. TGL paid a premium of $2,300 for his enrolment. Anson has obtained a medical refund of $6,900 from the insurance company. His medical expenses incurred in the mainland of $2,500 was not reimbursable by the insurance company. He obtained a refund of this from TGL.

4. On 15 August 2019, TGL granted Anson a right to subscribe 50,000 shares in the company at $2 each. The market price of the shares was $4 each. Anson paid $10,000 for this option. He exercised the option on 10 October 2019 to acquire all the shares. He sold the shares on the same day at the price of $5 each, and incurred stamp duty and other charges amounting to of $1,000.

5. On 6 January 2020, Anson was awarded 10,000 shares in the company. The shares were awarded to him without condition but he was not allowed to sell the shares for two years from the date of the award. The market value of the shares was $6 on that date.

6. Anson purchased a painting from an antique shop for $3,000. TGL agreed to pay the bill on his behalf as a gift as an appreciation of his services. Anson subsequently found that the painting was the work of a famous artist and the market value of it was $40,000.

7. In February 2020, Anson was required to travel to Vietnam to explore the feasibility of setting up a new factory there. TGL provided him with a round trip ticket and hotel accommodation for 7 nights (including 4 nights which he stayed behind for sightseeing). The costs of the air ticket and hotel accommodation of $5,000 and $7,000 respectively were paid by TGL.

Required:

(a) Advise Anson on his Hong Kong salaries tax position, including the basis of the assessment, any tax exemption or relief available, and the taxability of various benefits provided to him.

(b) On the assumption that Anson has not paid any tax elsewhere on his employment income, calculate his assessable income under Hong Kong salaries tax for the year of assessment 2019/20.