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Mr Chan owns a residential flat in Hong Kong which was let to Mr Lee who failed to pay rent from October 2 0 1
Mr Chan owns a residential flat in Hong Kong which was let to Mr Lee who failed to pay rent from October onwards. Mr Chan regained possession of the flat on April
The flat was vacant until September when Mr Chan entered into a five year lease agreement with Mr Lai on the following terms:
Lease duration: September to August
Rent: $ per month
Management fee: $ per month payable by Mr Lai direct to the property management company
Lumpsum premium payable on September : $
Rates were payable by Mr Chan. The amounts of rates paid by Mr Chan during the periods of letting were $ and $ for the years of assessment and respectively.
On March the Assessor wrote to Mr Chan advising him that he was satisfied that rents amounting to $ which had previously been assessed in the assessment had now become bad. $ of this amount was eventually recovered in March
Required:
a Compute the property tax liabilities of Mr Chan for the years of assessment and Show all your workings and ignore provisional tax.
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b Comment on the tax treatment you have accorded to the various items mentioned in the question.
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