Question 1

(25marks)

Walter Man, single, earned $700,000 income from employment for the year of assessment 2019/20. He made $18,000 as mandatory contribution to Mandatory Provident Fund (MPF) scheme, and incurred $5,000 self-study expenses in buying books in preparation for public examination. He also received monthly rental income of $25,000 from the letting of a property under mortgage. Interest payment was

$200,000 during the year.

(a)	Assess his total tax liabilities under salary tax and property tax.	(5 marks)
(b)	If Walter elects for Personal Assessment, evaluate his tax liabilities.	(5 marks)
(c)	Determine under what circumstances are Ad valorem stamp duty (AVD) be payable at 15% (Part 1 of Scale 1) and who are liable to pay AVD. If Walters property was bought on 20 December 2016, what was the AVD (in % of property value)?	(5 marks)
(d)	Judging from the changes in property price and stamp duty over the past ten years, discuss the impact of the introduction of the various types of stamp duty to property prices in Hong Kong.	(10 marks)