Vision Unlimited is a partnership between two cardiac specialists. Dr Chris Tong and Dr Jasper Pong, sharing profits in the ratio of 6:5. The partners are considering setting up a consultancy company to handle accounting and administrative functions. The partners spouses and family members will either be employed or be appointed as directors.

Dr Chris Tong and Dr Jasper Pong proposed that the consultancy company make the following payments

I. Salary of $120,000 to Dr Chris Tongs wife for acting as General Manager. Mrs Chris Tong is a full-time housewife

II. Directors fee of $120,000 to Dr Jasper Pongs mother, who is residing in Australia

III. Salary of $8,000 to Sebastian Pong, son of Dr Jasper Pong, who recently graduated from Republic Polytechnic with a Diploma in Communication.

Analyse and describe the tax implications for:

I. Salary to Dr Chris Tongs wife

II. Director fee to Dr Jasper Pongs mother

III. Salary to Sebastian Pong (6 marks)

Dr Chris Tong in his free time wrote a book for which he received a Royalty income in 2021. A breakdown of Royalty income and expenses is shown below:

Royalty Income	S$58,520
Related Expenses Incurred:
Advertisement and Publicity	S$8,600
Legal Fees	S$2,480
Printing and Stationary	S$15,500

Dr Chris Tong has 2 other properties in his name, which have been leased out. All the rental earnings are redirected to either offsetting the loan quantum or used as down payments for the properties he bought. He will borrow the maximum loan offered by the bank for any property invested. Property 2 was vacant for 3 months. The details of the properties are as follows:

Description	Property 1	Property 2
Rental Income	S$4,300 per month	S$3,700 per month
Property Tax	S$330 per month	S$280 per month
Maintenance Fees	S$190 per month	S$130 per month
Major Renovation	Nil	S$18,000
Repairs	S$1,600	Nil
Wall Painting	Nil	S$2,800

Determine and Illustrate the rental income assessable to Dr Chris Tong for Year of Assessment 2021. (6 marks)

Dr Chris Tong was given an Option to purchase 100,000 shares at S$2.80 each of his company under the Staff Share Option Scheme. He exercised the option and later sold the shares. The details of the share prices and the relevant dates are given below:

Date	Description	Market Price
5 October 2018	Option Exercise Price	S$2.80
12 July 2021	Option Exercised	S$3.50
19 August 2021	Sold the Shares	S$5.00

Calculate and illustrate the amount of Share Option benefit assessable to Dr Chris Tong