Hong Kong Taxation

Candy Suen rented out an office premise in Wanchai to Winny Ltd for many years at $30,000 per month. However, due to its poor trading performance, Winny Ltd has not paid the monthly rent since 1 January 2018. Rates paid by Candy for the flat were $10,000 per annum for the years ended 31 March 2018, 2019 and 2020. As Winny Ltd failed to pay the monthly rent, legal action was taken to recover the rent and to take repossession of the premise. On 1 May 2018, Winny Ltd was put into liquidation and the office premise was left vacant thereafter. The assessor agreed that the rent outstanding has become bad during the year of assessment 2018/19. The office premise was subsequently let to a new tenant from 1 June 2019 at $20,000 per month for a lease period of three years. In addition, Candy received $20,000 out of the outstanding rent from the final distribution of Winny Ltd on 10 June 2019.

Required: (a) Calculate the property tax liability for the year of assessment 2017/18. Ignore provisional tax.

(b) Calculate the property tax liability for the year of assessment 2018/19, and make any necessary adjustments to the property tax liability for the year of assessment 2017/18. Ignore provisional tax.

(c) Calculate the property tax liability for the year of assessment 2019/20. Ignore provisional tax.