Paul is considering acquiring a property in Hong Kong for residential purposes and has been given two
Question:
Paul is considering acquiring a property in Hong Kong for residential purposes and has been given two options by his employer:
(1) His employer will pay the maximum amount of housing entitlement to Paul as a housing allowance, regardless of the property's usage. Paul will use all or part of the allowance to repay the mortgage loan on the property.
(2) His employer will provide a low-interest mortgage loan to Paul to acquire a residential unit for his own use. The interest rate will be fixed at 2%, regardless of the market rate.
The property will be registered in Paul's name, and the loan will be made between Paul and his employer.
Required:
Advise Paul of the different treatments of the two options for salaries tax purposes. (
Advanced Financial Accounting
ISBN: 978-0137030385
6th edition
Authors: Thomas Beechy, Umashanker Trivedi, Kenneth MacAulay