The Assessment Year would be 2021/22. Notes on computation of Salaries Tax / Personal Assessment are attached. Jack and Mary, both are aged 33, have been married for 6 years. Jack is an accountant at a monthly salary of $48,000. Mary is a full-time clerk and earns $21,000 per month. Mary only makes mandatory contributions to her MPF scheme but Jack, in addition to the mandatory contributions, he also makes voluntary contributions of $2,500 per month to the Qualifying Tax Deductible MPF schemes. They have no children. They recently live in a self-occupied apartment valued at $5,000,000. They still have the mortgage payment amounted to $3,200,000. The current monthly mortgage payment is $19,000 paid by Jack. The familys other monthly expenses are totaled at $21,000. Apart from the mentioned expenses, Jack gives his parents (aged 59 and 56) $4,000 allowance monthly while Mary also supports her parents (aged 62 and 58) $4,000 living expenses monthly, both Jack and Marys parents are not living with them. Jack has life insurance protection of $2,000,000 insured amount. The beneficiary of his life insurance is Mary. Jacks employer provides group disability insurance and family medical insurance but Marys employer only provides medical insurance. Mary does not have any personal life insurance. Currently, they have no will being drafted. Jack and Mary currently have $200,000 in their bank saving account. Jack also has invested in some stocks which are listed on the Growth Enterprise Market (GEM) Board, the current market values of the stocks mostly are lower than the purchased prices.

(i)Jack and Mary would like to prepare a retirement fund. Jack plans to save $750 a month starting from today for 20 years and Mary plans to save $800 a month starting one month from today for 20 years. With the assumption of the annual interest rate is 5.5%, how much would they save in the retirement account at the end of the 20 years?

(ii) The Maybe Pay Life Insurance Company is trying to sell Jack an investment policy that will pay him $35,000 per quarter forever.

(a) If the required return on this investment is 6.2%, how much will Jack pay for the policy?

(b) Suppose a sales associate told Jack the policy costs $2,000,000, what interest rate would make this be a fair deal?

(iii) Would you suggest Jack and Mary to buy an investment-linked insurance policy? Explain.

(iv)What is the amount of MPF contribution for Jack and Mary per month? Explain.

(v) Do they qualify to elect joint assessment? Explain. (6 marks)

(vi) Suppose Jack and Mary elect joint assessments, compute the amount of salaries tax payable using the above information and the additional information below for the tax assessment year 2021/22.

Donation: $5,000 cash Mortgage interest: $150,000 paid during the assessment year.