ABC Limited was incorporated in 2017 to purchase land and to construct and operate a fun park in Tsun Mun. This project was never carried out and the company remained dormant for two years. In October 2019, the company purchased 1,200 shares of XYZ Limited (a company listed in Hong Kong) at $200 per share. Mr. Wong, the managing director of ABC Limited, arranged to pay for these shares through a loan of $240,000 granted by Standard Chartered Bank in Hong Kong. In August 2020, ABC Limited sold all its XYZ Limited shares at $280 per share. 

Required: 

Explain to Mr. Wong whether the profits made from XYZ Limited shares would be subject to profits tax.

Answer rating: 100% (QA)

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