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SelfTest_PA_ans 1
Notes:
(3) The salary received from the wife's business is exempt (s.8(2)(k)) as the amount is
disallowed for deduction from the business profits.
(4) Starting from 1 April 2003, the exemption of holiday warrant from tax has been
removed and any amount paid by the employer in connection with a holiday journey
of the employee cannot be excluded from income under s.9(2A)(c). This is the case
even though it is the sole and primary liability of the employer to provide the benefit
and it is not capable of being converted into money by the recipient.
(5) & (6) Reimbursement of an employee's private expenses (car rental, petrol costs, etc.)
by the employer is taxable (CIR v Humphrey), and these expenses paid are not
deductible as they were not necessarily incurred in the performance of Mr. Lau's
duties (Brown v Bullock).
(7) The tuition fee paid by Mr. Lau should be qualified for deduction as "self-education
expenses". However, any amount reimbursed by the employer is not allowable unless
it has been/will be assessable. Since the employer subsidized half of the tuition fee in
the sum of $20,000, Mr. Lau could claim the balance of $20,000 as deduction under
“self-education expenses”.
(10) Rates paid by landlord are deductible in calculating the Net Assessable Value and the
mortgage interest paid is deductible under personal assessment to the extent of
income included.
SelfTest_PA_ans 2