Mr. Ching was a PRC resident and was employed as a sales manager by Wang

Laboratories Limited in Hong Kong. He gave you the following information for the year

ended 31 March 2012:

1. He received an annual salary of $240,000.

2. He was provided with 2 rooms in a Hong Kong hotel for the period from 1.4.2011

to 30.6.2011. From 1.7.2011 to 31.12.2011, he moved into a flat for which he paid

rent, rates and management fee for a total of $21,500 per month. He received a

reimbursement from Wang Lab. Ltd. of $20,000 per month. From 1.1.2012

onwards, he moved into another flat which he acquired under joint names with his

wife. He continued to receive $20,000 per month from his employer as a housing

subsidy.

3. During the period he lived in the hotel, he was given a meal allowance of $1,000

per month. When he moved into the leased flat, his employer reimbursed him the

gas and electricity bills totalling $3,000 for the whole period. The employer also

made a contract with a domestic helper who costs $4,000 per month.

4. Due to his outstanding performance in sales negotiations, he won an award of

$5,000 under the company's incentive scheme.

5. He purchased a second-hand car at a cost of $30,000 for the purpose of meeting

clients. He paid insurance and licence fees totalling $10,000 for the whole year.

It was agreed with the Assessor that the private use of the car was 40%. A

depreciation allowance on the car was calculated to be $21,600.

6. He was asked by his employer to join the Hong Kong Country Club and he paid

annual subscription of $3,000 to the Club, one half of which was refunded by his

employer.

7. On 1 December 2010, he was granted a share option at a cost of $100 to purchase

1,000 shares in Wang Lab. Ltd. at $2 each. He sold the option to take up 400

shares on 12 January 2011 for $3,000. He subsequently exercised the option to

take up the remaining 600 shares on 4 April 2011. The 600 shares were sold for

$5,000 on 30 April 2011. Details of market value were as follows:

1 December 2010 $3.5

12 January 2011 $3.2

4 April 2011 $5.0

30 April 2011 $8.3

8. His wife has no income during the year of assessment 2011/12. His son, Alex,

aged 19, was studying in Canada and living with Mr. Ching's sister, Mrs. Kwan.

Because Mrs. Kwan had no children, she paid the school fees for Alex and wholly

supported his living.

9. Mr. Ching has a mother, aged 65, who is living together with the family. His

father, aged 67, is currently living in the PRC but fully maintained by Mr. Ching.

10. Mrs. Ching