Benson Tan is a 53-year old Singaporean. He has been working for Power Precision Inc (“PPI”), a company tax resident in England and which is also listed on the London Stock Exchange for the last 20 years. Benson and his family would come back to Singapore every year to celebrate Chinese New Year with his parents. Benson accepted the position of managing director at the Singapore subsidiary of PPI, Power Precision (Singapore) Pte Ltd (“PPS”) when the position became vacant in 2021. Benson wanted to move back to Singapore in view of his son’s impending National Service enlistment in 2022, as well as and be closer to his ageing parents. He relocated back to Singapore on 15 June 2021 together with his wife and his two younger children, 14-year old twins Olivia and Octavia. His 17-year old son, Brandon, remained in England to complete his GCSE A’ Levels in April 2022. Brandon will return to Singapore thereafter. Benson’s first day of work at PPS was 1 July 2021. He is married to Sarah, a Malaysian citizen with Singapore permanent resident status. Their 3 children are Singapore citizens, although they were born in England. His remuneration package comprises of monthly salary of $30,000 as well as a monthly entertainment allowance of $3,000. In addition, to the income information given above, Benson also received the following benefits/income and incurred the expenses given below for the year ended 31 December 2021:

1. Benson received an upfront bonus of $50,000 on 15 July 2021. He will have to refund part of the bonus if he does not complete a full employment year with PPS.
2. As Benson is required to work largely from home, he is provided with a monthly allowance of $200 to cover extra expenses incurred under this work arrangement. In this regard, he incurred the following expenses:
   • Benson signed up for fibre broadband for his sole use at home for business purposes. The monthly subscription fee is $50/month commencing 1 August 2021.
   • Benson purchased a printer for his sole use at home for business purposes. The printer costs $350, and he incurred a further $150 for ink cartridges
3. Benson was provided with a car for his use by his employer effective from 1/7/2021. The car costs $220,000 (not inclusive of COE of $80,000) and has a PARF value of $60,000. The insurance, road tax and maintenance expenses for the car is paid for by PPS and totalled $15,000 for the year ended 31 December 2021. Benson will bear the petrol and other daily running expenses.
4. As part of his relocation package back to Singapore, Benson was granted the option to purchase 20,000 shares in PPI at $13.50 per share. On 16 July 2021, he exercised the option and bought 10,000 shares when the market price was $14.70. Benson wanted to derive a steady stream of dividend income from the shareholdings. He used his personal savings to finance the acquisition. On 1 December 2021, Benson sold 5,000 shares at $20 each as he needed funds to renovate his property in Singapore before the family moved in to live.
5. Benson rented a house (annual value of $50,000) from 1 July 2021 to 30 June 2022. The house is fully furnished with air conditioners, water heaters, light fittings, oven, cooker, refrigerator, washing machine and dishwasher. The monthly rental of $8,000 is fully borne by the company.
6. PPS reimbursed medical expenses of $3,400 for Benson and his family under the company’s medical and hospitalisation scheme.
7. Benson incurred car hire charges of $5,000 while on an overseas business trip. The hire charges were reimbursed by his employer.
8. The company paid for the following overseas trips during the year:
   • Air tickets costing $3,000 to the USA to attend a business conference;
   • Air tickets costing $28,000 for Benson and his family to fly to England to visit his son
9. Benson incurred the following expenses for the period ended 31 December 2021, which his employer did not reimburse:
   • business entertainment expenses of $9,000;
   • taxi fares of $1,500 for trips from business entertainment venues to home; and
   • daily car running expenses totalling $3,300 for business-related trips using the company car provided.
10. Benson and his employer make CPF contributions within the statutory limits.
11. Benson also has the following income from the year 2021
    • Singapore one-tier dividend of $4,500.
    • Interest income from HSBC Bank, an approved bank of $1,500
    • Interest income of $600 from a loan to his friend.
    • Benson remitted savings of $100,000 back to Singapore on 5 July 2021. The savings were from his salary earned while working in Australia.
    • Benson owns an apartment that has always been rented out. His tenant moved out on 30/11/2021. For the year ended 31/12/2021, the income and expenses from the apartment are as follows:
      • Gross monthly rental: $8,000
      • Fire insurance and property tax (annual): $9,000
      • Monthly maintenance fee: $1,000
      • Replacement of air-conditioners in January 2021: $ 15,100
      • Mortgage repayment (monthly): $3,000 (comprising capital repayment of $2,000 and interest of $1,000)

Benson’s wife, Sarah, derived the following income in the year ended 31/12/2021:

12. Sarah commenced work as a music teacher with the Renaissance Music Academy, starting from 1/8/2021, and her monthly salary is $5,000.
    13. Sarah has rental income from an apartment in River Valley Road, Singapore. The apartment derived a net rental loss of $2,000 after deductible expenses.
    14. Sarah earned an interest income of AUD 5,000 (SGD 6,000) in 2021 from her deposit placement with ANZ Bank, Melbourne, Australia. The interest was remitted to Singapore on 3/1/2022.

Other information:

• Benson and his wife have hired a maid at a monthly salary of $800 to help with domestic chores and the children. The monthly levy of $60 is paid by Benson.
• Benson’s parents help to look after the grandchildren. His parents live with them. Benson’s father, a retiree, receives a monthly investment income of $1,200. Benson’s mother is a housewife and derives no income. Benson also gives both his parents monthly allowance of $500 each.
• Benson sends S$ 2,000 each month to his widowed mother-in-law in Malaysia for her daily living needs.
• Benson was not called up for reservist training during the year. He is a key appointment holder in the army (reservist).
• The children do not qualify for the parenthood tax rebate.

Other income / receipts

Singapore one-tier dividend

Interest income from HSBC

Interest income from ANZ Bank

Interest from loan to friend

Remittance of salary

Profit from sale of shares

Net rental income (show workings separately)

STATUTORY INCOME

Less: Personal Reliefs

Earned income relief

Spouse relief

CPF relief

- OW

- AW

Child relief

- QCR

- WMCR (for each child)

Maid levy relief

Parent relief

- Benson’s father

- Benson’ mother

- Sarah’s mother

Grandparent caregiver relief

NSMan relief /

NS wife relief

CHARGEABLE INCOME

Tax payable on 1st

Tax on next

Total tax payable

Answer rating: 100% (QA)

To calculate Benson Tans chargeable income and tax payable for the year ended 31 December 2021 we need to consider his income expenses and applicable ... View the full answer