Question 4 Mr. Ho is a PRC citizen and owns a landed property in Wanchai, Hong Kong. The property was let for rental income on the following terms: 1. The property was let to Miss Chu on a 3-year lease commencing on 1 December 2015. The monthly rent was $13,000 and the initial premium was $20,000. 2. Building management fee of $1,000 per month was paid by Miss Chu directly to the building management company. 3. On 1 November 2018, Mr. Ho agreed to extend the lease by two years (i.e. from 1 December 2018 up to 30 November 2020). In this regard, Mr. Ho received an additional premium of $30,000 for the lease period from 1 December 2018 to 30 November 2020 and increased the monthly rent to $15,000 with effect from 1 December 2018. 4. Mr. Ho has taken out mortgages with Hang Seng Bank Ltd to finance acquisition of the property. The annual interest expense for the Wanchai flat was $90,000. 5. Annual rates of $3,000 were paid by Mr. Ho. Required: a) Compute the property tax liability of Mr. Ho for the year of assessment 2018/19. Show all your workings. Ignore provisional tax. (11 marks) b) Discuss the tax treatments for building management fee (item 2 above) and interest expense (item 5 above). [Word limit is 60 words] (4 marks) (15 marks)