Question B1 Mr Peter Lee is employed as the Chief Financial Officer of Prosperous Trading Company Limited ("PTCL"), responsible for the financial reporting and company secretarial functions. PTCL is a company incorporated in Hong Kong and is engaged in the trading of electronics products. PTCL covers the trading activities in Hong Kong and China markets. Peter is married and his wife is named Mary. Mary is a housewife. During the year ended 31 March 2019, Peter received the following income and made the following payments in the year of assessment 2018/19. Annual salary: HK$840,000. (1) Bonus: HK$30,000. The bonus was received for his great performance of PTCL. (2) A Filipino domestic helper employed by PTCL at an annual wage of $56,000 was (3) assigned to serve Peter's family. The contract with the domestic helper was signed by Peter. A rent refund of $15,000 per month in respect of a flat leased by Peter at a monthly rent (4) of $19,000. Peter has been required to submit rental receipts to PTCL to support the claim for the refund. He has been living in the same flat for the whole year. A car rented by PTCL at an annual rental of $30,000 was given to Peter for his private use. (5) In addition, Peter received a total cash reimbursement of $8,000 from PTCL to cover the petrol costs. Peter makes contributions of $3,500 per month to mandatory provident scheme. (6) (7) Annual membership fees were paid to: The Association of Chartered Certified Accountants $2,500 The Hong Kong Institute of Certified Public Accountants - Waived The Hong Kong Institute of Chartered Secretaries - $2,240 The Hong Kong Jockey Club - $20,000 A tuition fee of S100,000 was paid by Peter to The Hong Kong Polytechnic University for (8) his study for a part-time Master Degree on Accounting in China. PTCL refunded half of the tuition fee to Peter. Peter made a donation to the Community Chest and Po Leung Kuk in the amount of (9) $40,000 and $30,000 respectively. Page 7 of 13 (10) Peter and Mary have three children. The eldest child (aged 23) was born by Peter's ex- wife and is studying for a full-time master degree at a UK University. The second child (aged 21) is studying full time at The Chinese University of Hong Kong. The youngest child (aged 19) works in a local certified public accountants' firm. (11) Peter's mother (aged 60) lived with Peter's family throughout the year and was fully supported by them. Peter's father, Mary's father and mother were passed away several years ago. Peter also paid $1,000 per month towards the maintenance of his ex-wife's mother (aged 66), who is an ordinary resident of Hong Kong. (12) Required: Prepare a computation of salaries tax payable by Peter for the year of assessment 2018/19. (Show all your workings in good format and ignore any provisional tax or tax rebate). (18 marks)
