Mr Chan is a designer employed by Daily Fashion Ltd. During the year of assessment 2017/18, he has the following income and benefits:

(1) monthly salary of $40,000;

(2) bonus of $40,000;

(3) a holiday passage allowance of $50,000, 40% of which was used to purchase holiday warrants for himself and his wife whilst the balance was retained by him;

(4) free education benefits for his son, aged 21. The tuition fee for the year was $150,000.

Mr Chan is required to incur all the sample material costs in the performance of his duties. Assessor agreed that the total sample material expenses incurred during the year amounted $20,000.

During the year, Mr Chan donated $88,000 to the Community Chest and contributed 5% of his monthly salary to the company's retirement scheme that is a MPF-exempted scheme.

Mr and Mrs Chan purchased a property as their dwelling as joint tenants by means of a mortgage loan from Bank of China. The monthly repayment was wholly made by Mr Chan. The mortgage loan interest of $160,000 was paid in the year.

Mrs Chan is a part-time teacher and her salary for the year ending 31.3.2018 was $160,000. During the year, Mrs Chan incurred the following expenses:

1. cash donation of $35,000 to approved charitable organizations;
2. contribution of $8,000 to approved MPF scheme;
3. tuition fee of $40,000 for a course at City University of Hong Kong.

Required:

(a) Compute the salaries tax liability of Mr and Mrs Chan for the year of assessment 2017/18 under separate taxation assuming that Mr Chan is nominated to claim the child allowance.

(b) Compute the salaries tax liability of Mr and Mrs Chan for the year of assessment 2017/18 under joint assessment and advise whether they should elect joint assessment.