Ibrahim Edogan is a 55 year old Turkish citizen settled in the island of Penang under the 'Malaysia:

My Second Home' programme since 2012. Ibrahim is a well-known author who likes the Malaysian

food and climate. His wife, Azlina Hameed is a Malaysian citizen and she is currently a homemaker.

She opted for early retirement from the government service due to ill-health and receives a pension of

RM2,300 a month.

On 12 February 2012, Ibrahim brought his savings into Malaysia which was equivalent to RM5 million.

He bought a condominium in Gurney Drive, Penang for RM1.2 million. He also purchased shares in

public-listed companies and unit trusts in Malaysia, United Kingdom and Singapore. He purchased an

exclusive office unit in Gelugor, Penang with an existing tenant. The office unit cost him RM980,000.

Ibrahim declared the following income to the Inland Revenue Board of Malaysia (IRBM) for the basis

year 2016:

i. Business Income

Ibrahim is in a partnership, sharing equally the profits and losses with a Malaysian in a Turkish

restaurant business in Penang. His statutory income from the partnership business is

RM122,000.

ii. Dividend income

Single tier dividend from Nestle Bhd. of RM22,000 was declared in December 2015 but

received on 6 January 2016.

Dividend income equivalent to RM125,000 from share investments in the United

Kingdom remitted to Malaysia during the year.

iii. Income from unit trust

A sum of RM39,000 distributed from BLH Premier Unit Trust, Singapore was received during

the year. The income was remitted to Malaysia from Singapore on 5 December 2016.

iv. Royalty income

Royalty income of RM110,000 was received in respect of writing a novel, it was paid by a local

publisher. He incurred RM12,000 on research and he paid RM14,000 for editing his

manuscript during the year 2016.

v. Rental income

Rental income was received from an office unit in Penang which was rented out at RM5,000

per month for the last three years to a travel agent. It became vacant on 30 April 2016. It was

rented to a new tenant after repairs on 1 September 2016 for RM6,000 per month. For the

basis year 2016, Ibrahim incurred the following expenses towards the office unit.

RM

Interest on bank loan of RM350,000 12,000

Quit rent and assessment 2,800

Fire insurance 3,200

Repairs 5,000

Installation of burglar alarm 2,500

Advertisement cost to find a new tenant 1,400

Service charges for building maintenance 4,800

vi. Ibrahim has four children. The first child Zalik, aged 22, is pursuing an engineering degree at

the Multimedia University. The second child, Faridah, aged 19, is pursuing medicine at

Glasgow University. Her father spent RM140,000 towards her fees and accommodation. She

received RM50,000 per annum from a trust fund set up by her grandfather. The third child

Rosmah, aged 15, is studying at a government secondary school. A fourth child, named

Normah was born during the year.

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vii. Ibrahim pursued a post-graduate Masters degree in Business Administration on a part time

basis at University Science Malaysia and he incurred fees amounting to RM13,000 in 2016.

viii. Azlina, suffering from cancer, underwent surgery and chemotherapy at a private medical centre

in October 2016. Ibrahim incurred medical expenses of RM74,000 during the year.

ix. He paid life assurance premiums of RM15,000.

x. Ibrahim bought a laptop computer for himself for RM3,300 and a treadmill for the family

amounting to RM3,200. He bought books and magazines for the family for RM870. Ibrahim has

the necessary supporting documentation for these expenditure.

xi. His mother, who is 80 years old, lives with him and she has no independent income of her own.

xii. He contributed RM1,200 in Zakat to fulfil his religious duty.

Required:

Compute the total income, chargeable income and tax payable of Ibrahim Edogan for the year

of assessment 2016 under joint assessment, assuming Azlina is the one who elected to be

assessed with her husband's income.

[Total: 30 marks]