Simon Smith, a US resident, is working as a marketing manager for a US company(USCo). From 1 April 2014, he started to travel around the region visiting USCo's operations and meeting clients. During the year ended 31 March 2015, Simon spent a total of 230 days in Hong Kong as follows:

7 April 2014 to 1 May 2014

12 June 2014 to 9 September 2014 90 (including 20 days annual leave)

14 October 2014 to 5 February 2015

All his remuneration is paid into Simons bank account in the US. For the year ended 31 March 2015, Simon had the following income and expenditure:

(1) A monthly salary of $96,000.

(2) An annual entertainment allowance of $48,000, of which only $40,000 was actually expended

3) Simon was provided with a hotel serviced apartment in Hong Kong with aa monthly rental of 12,000. The total annual charges for this serviced apartment of $144,000 were paid directly to the hotel company by USCo and 5% of the total charges was deducted from Simons salary

(4) Received a reimbursement of medical expenses in the sum of $45,000 from a medical insurance scheme. USCo is contracted to pay an annual premium of $6, 000 to the scheme for each of its staff

(5) During the year, USCo paid $45, 000 to a travel company to purchase a package tour to Canada to be taken by Simon for holiday purposes. The package tour could be transferred to another person for $40,000. USCo also paid 51, 000 to take out a travel insurance policy for Simon

(6)USCo provided Simon with a company car for his use. The market value of the car was $280,000 and the second hand value as at 31 March 2015 was 5210, 000. USCo also provided Simon with a corporate credit ca which he used to pay for his petrol costs of $3,000 per month. The credit card balance was settled in full by USCo. It has been agreed with the assessor that 75% of the usage of the car was for USCo's business

(7)For business purposes, Simon joined the International Golf Club for an annual membership fee of $35,000 USCo agreed to reimburse half of the annual membership fee. Simon also paid an annual membership fee of 52, 600 to The Chartered Association of Marketing

(8) During the year, Simon enrolled onto a Putonghua course offered by a local university and paid a tuition fee of 15, 000. The enrolment was fully supported by USCo, as it plans to expand its business in China. USC reimbursed Simon half of the tuition fee

(9) On 1 April 2013. Simon was granted 5,000 shares by USCo subject to a vesting period. The shares vested in him on 30 September 2014. The market value of the shares on April 2013 and 30 September 2014 was $55006 respectively.

(10)On 1 October 2014, Simon was given an option to purchase 100,000 shares in Diamond Inc, a subsidiary of USCo which is listed on the New York Stock Exchange, at a price equivalent to $15 per share. Simon paid $2,000 for this option. The market price of Diamond Inc shares on 1 October 2014 was $16 per share. Simon tercile the option to purchase 50, 000 of the shares on 30 November 2014 when the market price of the shares was $18 per share

Calculate Simon's net assessable income.

Answer rating: 100% (QA)

Taxable Income of Simon smith Annual Salary 1152000 Entertainment ... View the full answer