Mr Wong is currently employed as the senior marketing manager of Beta Ltd (Beta), a company incorporated and carrying on business in Hong Kong During the year ending 31 March 2020, Mr Wong is expected to have the following income and expenditure A monthly salary of $38,000, out of which 5 is deducted for MPF contribution A total entertainment allowance of $50,000, of which $42,000 is spent by Mr Wong and supported with vouchers Beta has provided Mr Wong with a company car for his use The original cost of car was $300,000 and the second hand value as at 31 March 2020 is estimated to be $180,000 The total petrol cost for the year of $20,000 is reimbursed by Beta Mr Wong has agreed with the Inland Revenue Department that 70 of the car usage was related to company business On 1 January 2020, Mr Wong was given an option to purchase 60,000 shares at $12 each in Beta He paid $4,000 for this option On 15 January 2020, he sold the option for 15,000 shares for $18,000, On 1 March 2020, he exercised the option to acquire the remaining 45,000 shares and sold the shares on the next day The share market values per share of Beta were as follows 1 January 2020 $13 15 January 2020 $16 1 March 2020 $20 2 March 2020 $18 Mr Wong was requested by Beta to join the Chinese Recreation Club for client entertainment purposes During the year, Mr Wong paid a club joining fee of $10,000 and an annual membership fee of $4,000 Beta agreed to reimburse 40 of the joining fee paid by Mr Wong Beta has set up a discretionary educational trust for the children of its employees During the year, the trustee made a grant of $30,000 to Mr Wongs son who is studying full time in Japan Mr Wong paid a tuition fee of $150,000 for a part time MBA course offered by a university in Hong Kong A residential property in Causeway Bay was acquired in the name of Mr Wong two years ago and was occupied by him as his place of residence The property was financed by a mortgage loan from Hang Seng Bank During the year ending 31 March 2020, a total loan interest of $9,000 is expected to be paid by Mr Wong to Hang Seng Bank Mr Wong is married with one child His wife is a housewife Their son, aged 19, is studying full time in Japan 3 10 Mr Wongs father, aged 72, is currently living with Mr Wong Mr Wongs mother, aged 68, is currently staying in a registered nursing home in Hong Kong at a cost of $10,000 per month, which is paid by Mr Wong 11 Mrs Wong had made a cash donation of $23,000 to the Tung Wah Group of Hospitals Required Based on the Inland Revenue Ordinance and the prevailing practice, prepare the Hong Kong salaries tax computation for Mr Wong for the year of assessment 2019 20, showing clearly the basis period, assessable income, net assessable income, net chargeable income and the salaries tax payable Ignore provisional tax and tax concession (20 marks)

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Mr Wong is currently employed as the senior marketing manager of Beta Ltd (Beta), a company incorporated and carrying on business in Hong Kong. During

Mr Wong is currently employed as the senior marketing manager of Beta Ltd (Beta), a company incorporated and carrying on business in Hong Kong. During the year ending 31 March 2020, Mr Wong is expected to have the following income and expenditure:

A monthly salary of $38,000, out of which 5% is deducted for MPF contribution.
A total entertainment allowance of $50,000, of which $42,000 is spent by Mr Wong and supported with vouchers.
Beta has provided Mr Wong with a company car for his use. The original cost of car was $300,000 and the second-hand value as at 31 March 2020 is estimated to be $180,000. The total petrol cost for the year of $20,000 is reimbursed by Beta. Mr Wong has agreed with the Inland Revenue Department that 70% of the car usage was related to company business.
On 1 January 2020, Mr Wong was given an option to purchase 60,000 shares at $12 each in Beta. He paid $4,000 for this option. On 15 January 2020, he sold the option for 15,000 shares for $18,000, On 1 March 2020, he exercised the option to acquire the remaining 45,000 shares and sold the shares on the next day. The share market values per share of Beta were as follows:

1 January 2020 $13 15 January 2020 $16 1 March 2020 $20 2 March 2020 $18
Mr Wong was requested by Beta to join the Chinese Recreation Club for client entertainment purposes. During the year, Mr Wong paid a club joining fee of $10,000 and an annual membership fee of $4,000. Beta agreed to reimburse 40% of the joining fee paid by Mr Wong.
Beta has set up a discretionary educational trust for the children of its employees. During the year, the trustee made a grant of $30,000 to Mr Wongs son who is studying full time in Japan.
Mr Wong paid a tuition fee of $150,000 for a part-time MBA course offered by a university in Hong Kong.
A residential property in Causeway Bay was acquired in the name of Mr Wong two years ago and was occupied by him as his place of residence. The property was financed by a mortgage loan from Hang Seng Bank. During the year ending 31 March 2020, a total loan interest of $9,000 is expected to be paid by Mr Wong to Hang Seng Bank.
Mr Wong is married with one child. His wife is a housewife. Their son, aged 19, is studying full-time in Japan.

10. Mr Wongs father, aged 72, is currently living with Mr Wong. Mr Wongs mother, aged 68, is currently staying in a registered nursing home in Hong Kong at a cost of $10,000 per month, which is paid by Mr Wong.

11. Mrs Wong had made a cash donation of $23,000 to the Tung Wah Group of Hospitals.

Required:

Based on the Inland Revenue Ordinance and the prevailing practice, prepare the Hong Kong salaries tax computation for Mr Wong for the year of assessment 2019/20, showing clearly the basis period, assessable income, net assessable income, net chargeable income and the salaries tax payable. Ignore provisional tax and tax concession. (20 marks)