Wins Ltd owns Property A in Hong Kong. The purchase of the property was financed by...
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Wins Ltd owns Property A in Hong Kong. The purchase of the property was financed by a mortgage loan from Hong Kong Bank. On 1 October 2019, the property was let to Mr Choy for a period of 4 years under the following terms: a. monthly rent: $10,000 payable on the first day of each month; b. lump sum premium: $240,000 payable on 1 October 2019; c. management fee: $1,000 per month payable by tenant; and d. rates and government rent paid by tenant. During the year ended 31 March 2021, Wins Ltd incurred the following expenses in relation to Property A: - repairs: $40,000; and mortgage loan interest: $105,000. Wins Ltd also carries on a general trading business in Hong Kong. However, it makes no application for exemption from property tax. It derived an assessable profit of $100,000 for the year of assessment 2020/21. The above income and expenditure in relation to the property had been included in the accounts of Wins Ltd and adjusted in the ascertainment of its assessable profits. Required: a. Compute the property tax payable by Wins Ltd for the year of assessment 2020/21. Ignore provisional property tax. b. Compute the net profits tax payable/refundable by Wins Ltd for the year of assessment 2020/21, if property tax for the year of assessment 2019/20 has been paid. c. Advise Wins Ltd on the conditions for an application for exemption from property tax. Wins Ltd owns Property A in Hong Kong. The purchase of the property was financed by a mortgage loan from Hong Kong Bank. On 1 October 2019, the property was let to Mr Choy for a period of 4 years under the following terms: a. monthly rent: $10,000 payable on the first day of each month; b. lump sum premium: $240,000 payable on 1 October 2019; c. management fee: $1,000 per month payable by tenant; and d. rates and government rent paid by tenant. During the year ended 31 March 2021, Wins Ltd incurred the following expenses in relation to Property A: - repairs: $40,000; and mortgage loan interest: $105,000. Wins Ltd also carries on a general trading business in Hong Kong. However, it makes no application for exemption from property tax. It derived an assessable profit of $100,000 for the year of assessment 2020/21. The above income and expenditure in relation to the property had been included in the accounts of Wins Ltd and adjusted in the ascertainment of its assessable profits. Required: a. Compute the property tax payable by Wins Ltd for the year of assessment 2020/21. Ignore provisional property tax. b. Compute the net profits tax payable/refundable by Wins Ltd for the year of assessment 2020/21, if property tax for the year of assessment 2019/20 has been paid. c. Advise Wins Ltd on the conditions for an application for exemption from property tax.
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Answer to Question part a Wins Ltd Computation of Property Tax Payable for the year of Assessment 202021 Rental Income 1000012 120000 Less Management ... View the full answer
Related Book For
Intermediate Financial Management
ISBN: 978-1285850030
12th edition
Authors: Eugene F. Brigham, Phillip R. Daves
Posted Date:
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