| |
|
|
Question(s) |
 |
General Issues
|
|
|
|
Who should
complete the Return |
|
|
|
How to handle change
of ownership |
|
|
|
How to report letting
income |
|
|
|
How to claim deductible
expenses/allowances |
|
|
|
How to claim tax relief
under Personal Assessment |
|
|
|
How to
claim exemption from Property Tax |
|
34 - 35 |
|
Property without rental
income |
|
|
| |
|
Introduction
|
The following questions and answers
will help joint owners, owners in common and owners other than
individuals in the completion of their Property Tax Returns.
|
|
| General Issues |
| 1. |
I have received a Property Tax Return
(B.I.R.57) last week. When should I return it to your Department?
[Answer] |
| 2. |
Do I have to attach any supporting
documents to the Return as proof for the figures that I filled
in? [Answer] |
| 3. |
My spouse and I have
received a Property Tax Return (B.I.R.57) for the year of assessment
2007/08. What is the reporting period for details of rent from
our property? [Answer] |
| 4. |
I earned rental income from several
properties. Which tax returns should I complete? [Answer]
|
| 5. |
My 3 sons and I are the joint owners
of a property. How should I complete my share of ownership?
[Answer] |
| 6. |
My 2 daughters and I own a property
as tenants-in-common. I own 50% and each of my daughters owns
25%. How should I complete the shares of ownership? [Answer]
|
| 7. |
My spouse and I have commenced to
receive rent from our jointly owned property at $10,000 per
month on 1.4.2007. How is Property Tax computed? [Answer]
|
| 8. |
A few months ago, I completed a "Notification
of Letting" (I.R.C.Form 5712), specifying that the property
jointly owned by my spouse and me had been let since June 2007.
I had also stated the monthly rent received. Why are we required
to complete Property Tax Return for the year 2007/08?[Answer]
|
| |
| Who should
complete the Return |
| 9. |
The property is owned by my parents
and me. Do you require signatures from all of us on the Return
(B.I.R.57)? [Answer] |
| 10. |
My parents are joint owners of the
property. If they are unable to write, how can they sign on
the Return (B.I.R.57)? [Answer] |
| 11. |
I am the agent of the property owners
who are residing outside Hong Kong. Can I complete the Return
(B.I.R.57) on behalf of the owners? [Answer] |
| 12. |
We own a piece of bare land with
no property built upon it. Why are we required to complete Property
Tax Returns and chargeable to Property Tax? [Answer]
|
| 13. |
We sold the property last year. Why
are we still required to complete a Property Tax Return (B.I.R.57)?[Answer]
|
| 14. |
The property is owned by a corporation
and the rental income should be subject to Profits Tax. Why
do you still send out a Property Tax Return (B.I.R.58) for completion?
[Answer] |
| 15. |
Is an incorporated owner of a building
required to report rental income derived from letting the common
areas of the building in a B.I.R.58? [Answer]
|
| |
| How
to handle change of ownership |
| 16. |
How should I report the change of
ownership in Part 3 of the Return? [Answer]
|
| 17. |
I have received a Property Tax Return
for a property owned by my parents and me. My mother passed
away on 1.8.2007. How should I complete the Property Tax Return
for 2007/08? [Answer] |
| |
|
| How to report
letting income |
| 18. |
My spouse and I had let out the flat
and carpark together to the same tenant at one lump sum rental.
However, I received two separate Property Tax Returns, how should
I fill in Part 4 of the Return? [Answer]
|
| 19. |
My husband and I jointly own a flat
and a carpark. The flat is let for rental income and the carpark
is used for parking our own car. The Property Tax Return shows
the location of property as consisting of both the flat and
the carpark. How should we report this situation in the tax
return? [Answer] |
| 20. |
If the property is sub-divided into
several small units for letting, how should we report this situation
in the tax return? [Answer] |
| 21. |
Our property was let for 9 months
only during the year of assessment 2007/08. It was vacant for
the period from August to October 2007. How should we report
this situation in the tax return for that year? [Answer] |
| 22. |
My brother and I own a property as
tenants-in-common. My brother let out his share of one room in
our flat. The remaining area is for my own use, how should we
report this situation in the tax return? [Answer] |
| 23. |
What is the meaning of "complete
months" in Part 4.1 of the Return? [Answer]
|
| 24. |
What is "lease premium"?
[Answer] |
| 25. |
What is "rent recovered"?
[Answer] |
| |
|
| How to claim
deductible expenses/allowances |
| 26. |
We have to pay building management
fees and certain other out of pocket expenses for the property.
Are they deductible? Should we deduct them from the rental income
and report the net amount of the income? [Answer]
|
| 27. |
If the tenant fails to pay rent,
can I report the uncollected rent in Part 4.3(2) of the Return?
[Answer] |
| 28. |
My spouse and I own a property let
out for rental income. Can we claim basic or other tax allowances
(such as child, dependent parent allowances)? [Answer]
|
| |
|
| How to claim
tax relief under Personal Assessment |
| 29. |
What is the meaning of "Personal
Assessment"? [Answer] |
| 30. |
How do property owners apply for
Personal Assessment? [Answer] |
| 31. |
I had already elected Personal Assessment
for past year(s), do I need to elect Personal Assessment again
for the year 2007/08? Would your Department treat me as an elector
of Personal Assessment automatically? [Answer] |
| 32. |
My spouse and I have salaries income
of $200,000 and rental income of $80,000 from a jointly owned
property during the year 2007/08. Should we elect for Personal
Assessment? [Answer] |
| 33. |
How to claim for deduction of mortgage
interest? [Answer] |
| |
|
| How
to claim exemption from Property Tax |
| 34. |
Under the provisions of the Inland
Revenue Ordinance, rent received from the letting of a property
owned by a corporation is subject to both Property Tax and Profits
Tax. How could the corporation avoid the same income from being
taxed twice? [Answer] |
| 35. |
How can charitable bodies claim exemption
from Property Tax? [Answer] |
| |
| Property
without rental income |
| 36. |
If I receive the Return (B.I.R.57/58),
do I have to complete and send it back? [Answer] |
| 37. |
About three years ago our organization
received a B.I.R.58 and in it we stated that the property was
for own use. We received a B.I.R.58 last week. Do we have to
complete it? [Answer] |
| 38. |
We have received a Property Tax Return
for the year of assessment 2007/08. Our property was for own
use up to 31 March 2008 and so we stated “no income”
in the B.I.R.57. However, we intend to let out the property
on 1 July 2008. Do we need to inform your Department once we
have started to receive rent? [Answer] |
| |
|
| |
|
|
Questions and Answers
|
| |
General Issues
|
| 1. |
Q: |
I have received a Property Tax
Return (B.I.R.57) last week. When should I return it to your
Department? |
| |
|
|
| |
A: |
You should submit the Return within
1 month from the date of issue of the Return.
However, if your case meets the criteria specified by the
Commissioner of Inland Revenue, you may choose to file the
Return through the Internet and an extension of 2 weeks will
be granted automatically. To know more about electronic filing,
please click here.
|
| |
|
|
| |
|
|
|
| 2. |
Q: |
Do I have to attach any supporting
documents to the Return as proof for the figures that I filled
in? |
| |
|
|
| |
A: |
You are not required to attach supporting
documents at the time of filing the Return. The law requires
the owners to keep and retain sufficient rental records for
7 years. You have to provide documents as evidence for deductions/claims
when the Assessor requires you to do so. |
| |
|
|
| |
|
|
|
| 3. |
Q: |
My spouse and I have received
a Property Tax Return (B.I.R.57) for the year of assessment
2007/08. What is the reporting period for details of rent from
our property? |
| |
|
|
| |
A: |
Normally, the reporting period is
from 1st April of the year to 31st March of the following year
(i.e. 1.4.2007 to 31.3.2008 for the year of assessment 2007/08).
However, for the year of acquisition, the reporting period is
from the date of purchase to 31st March. For the year of disposal,
the reporting period is from 1st April to the date of cessation
of ownership. |
| |
|
|
| |
|
|
|
| 4. |
Q: |
I earned rental income from several
properties. Which tax returns should I complete? |
| |
|
|
| |
A: |
You should report rental income of
all of your solely owned properties in your Tax Return
- Individuals (B.I.R.60).
The rental income for each
of the properties for which you are a joint owner or
an owner in common is to be reported in a Property
Tax Return (B.I.R.57). Annual Property tax Returns are issued
to the owners of jointly-owned or co-owned properties on a
property-by-property basis, and can be completed and submitted
by any one of the owners.
|
| |
|
|
| |
|
|
|
| 5. |
Q: |
My 3 sons and I are the joint
owners of a property. How should I complete my share of ownership? |
| |
|
|
| |
A: |
You should treat the total ownership
as 100% and divide it equally amongst the owners. This means
each person's share of ownership is 25%. |
| |
|
|
| |
|
|
|
| 6. |
Q: |
My 2 daughters and I own a property
as tenants-in-common. I own 50% and each of my daughters owns
25%. How should I complete the shares of ownership? |
| |
|
|
| |
A: |
You should state the share of ownership
in the B.I.R.57 as: |
| |
|
|
You |
50% |
|
| |
|
|
1st daughter |
25% |
|
| |
|
|
2nd daughter |
25% |
|
| |
|
|
|
|
|
| |
|
|
|
|
|
|
| 7. |
Q: |
My spouse and I have commenced
to receive rent from our jointly owned property at $10,000 per
month on 1.4.2007. How is Property Tax computed? |
| |
|
|
| |
A: |
Property Tax is calculated at the
standard rate by the year of assessment on the net assessable
value. Your Property Tax liability is computed as follows: |
| |
|
|
$ |
|
| |
|
Rent for 12 months ($10,000 x 12) |
120,000 |
|
| |
|
Less: 20% statutory allowance for
repairs and outgoings |
24,000 |
|
| |
---------- |
| |
|
Net assessable value |
96,000 |
|
| |
---------- |
| |
|
Property Tax for 2007/08
@16% |
15,360 |
|
| |
===== |
| |
|
Provisional Property Tax for 2008/09
@16% |
15,360 |
|
| |
===== |
| |
|
Total tax payable |
30,720 |
|
| |
===== |
| |
|
|
|
| |
|
|
|
| 8. |
Q: |
A few months ago, I completed
a "Notification of Letting" (I.R.C.Form 5712), specifying that
the property jointly owned by my spouse and me had been let
since June 2007. I had also stated the monthly rent received.
Why are we required to complete Property Tax Return for the
year 2007/08? |
| |
|
|
| |
A: |
According to the Inland Revenue Ordinance,
the owner has to declare his/her rental income in a specified
Tax Return. Assessment will then be raised by reference to the
Tax Return filed. Submission of I.R.C. Form 5712 can only serve
as a notification informing us the start date of letting your
property; it cannot be regarded as a Tax Return. So, even if
you have furnished the Form, you still have to declare the annual
rental income and claim your deductions in the Property Tax
Return. |
| |
|
|
| |
|
|
|
Who should complete the Return
|
| 9. |
Q: |
The property is owned by my parents
and me. Do you require signatures from all of us on the Return
(B.I.R.57)? |
| |
|
|
| |
A: |
The Return can be completed and signed
by any one owner. Therefore, only one of you is required to
complete the Return and sign the declaration. |
| |
|
|
| |
|
|
|
| 10. |
Q: |
My parents are joint owners
of the property. If they are unable to write, how can they sign
on the Return (B.I.R.57)? |
| |
|
|
| |
A: |
If the owner is unable to write,
the affixing of a name-chop, thumbprint or mark (such as “x”)
as the owner's signature can be accepted, provided that it is properly witnessed
by a person aged 18 or more. The witness should sign and date,
and state his/her full name and Identity Card number beside
his / her signature. |
| |
|
|
| |
|
|
|
| 11. |
Q: |
I am the agent of the property
owners who are residing outside Hong Kong. Can I complete the
Return (B.I.R.57) on behalf of the owners? |
| |
|
|
| |
A: |
Provided that you are in possession
of a written authorization from the owners, you can complete
the Return on their behalf. You should attach to the Return
a copy of the relevant Power of Attorney or Letter of Authorization
if this is the first time you act as agent. |
| |
|
|
| |
|
|
|
| 12. |
Q: |
We own a piece of bare land with
no property built upon it. Why are we required to complete Property
Tax Returns and chargeable to Property Tax? |
| |
|
|
| |
A: |
According to the Inland Revenue Ordinance,
Property Tax is charged on rental income from the letting of
any land and/or buildings. So, the Department issues Property
Tax Returns to owners of land and charges them for Property
Tax on the rental income received. |
| |
|
|
| |
|
|
|
| 13. |
Q: |
We sold the property last
year. Why are we still required to complete a Property Tax
Return (B.I.R.57)? |
| |
|
|
| |
A: |
Please check the year of assessment
stated on the front page of the Property Tax Return (B.I.R.57)
to see if this is for the year of assessment 2007/08 or for
an earlier year of assessment. This is to ensure that you
will complete the Return correctly with the appropriate period
of rental income.
If you sold your property on say 1 July 2007, then you would
have to report details of the rent received from 1 April to
30 June 2007 in the B.I.R.57 for 2007/08.
If the property was vacant prior to sale, say from 1 April
to 30 June 2007, you should put a “ ”
in the box against “No” in the top portion of
Part 4 of the Return.
If you sold the property in December 2006 and hence you did
not own that property on 1 April 2007, you should give the
date of disposal of the property in Part 3 and put a “”
in the box against “No” in the top portion of
Part 4 of the Return.
|
| |
|
|
| |
|
|
|
| 14. |
Q: |
The property is owned by a corporation
and the rental income should be subject to Profits Tax. Why
do you still send out a Property Tax Return (B.I.R.58) for completion? |
| |
|
|
| |
A: |
Income will not be taxed twice under
two different heads of charge.
Generally speaking, section 2 of the Inland Revenue
Ordinance provides that letting of property by a corporation
would be regarded as the carrying on of a business, and the basic charge for all rental income is Profits Tax. However, under section 5 of the Ordinance, a corporate property owner is also chargeable to Property Tax on rental income from the letting of property. For this reason, sometimes Property Tax
Returns (B.I.R.58) are issued to corporations. If the letting
income is chargeable to Profits Tax or the property is used
for producing chargeable profits, exemption from Property
Tax under section 5(2)(a) of the Inland Revenue Ordinance
can be claimed in Part 5 of the Return (B.I.R.58). In any
event, Part 4 must also be completed, otherwise the Assessor
may raise queries.
|
| |
|
|
| |
|
|
|
| 15. |
Q: |
Is an incorporated owner of a
building required to report rental income derived from letting
the common areas of the building in a B.I.R.58? |
| |
|
|
| |
A: |
The common parts of a building are
collectively owned by the individual owners of the building.
Hence, the rental income derived from the letting of common
areas such as a side shop, carpark, external wall, roof top
etc is assessable to Property Tax and the incorporated owner
is required to complete the Property Tax Return (B.I.R.58) on
behalf of all the owners of the building. Name of the incorporated
owner and other particulars are to be completed in Part 1 of
the Return. Please note that section 16 of the Building Management
Ordinance [see
appendix] provides that the rights and duties of the
owners in relation to the common parts of the building shall
be exercised and performed by the incorporated owners of the
building. |
| |
|
|
| |
|
|
|
How to handle change of ownership
|
| 16. |
Q: |
How should I report the change
of ownership in Part 3 of the Return? |
| |
|
|
| |
A: |
You are not required to fill in the
date of acquisition of the property in Part 3. However, for
other types of changes, such as the disposal of property, change
of ownership due to the addition of an owner or the death of
an owner, etc., you should fill in the date of change in Part
3. |
| |
|
|
| |
|
|
|
| 17. |
Q: |
I have received a Property
Tax Return for a property owned by my parents and me. My mother
passed away on 1.8.2007. How should I complete the Property
Tax Return for 2007/08? |
| |
|
|
| |
A: |
The death of your mother gives
rise to a change of ownership.
If your parents and you are the joint owners of the property
concerned, your mother's share of ownership will be passed
to you and your father. In order to distinguish new ownership
from old ownership, a new Property Tax file will be opened
in the name of you and your father.
If your parents and you had owned the property as tenants-in-common,
your mother's share of ownership will be passed to the beneficiary
named in her will or according to the law of intestacy. Again,
in order to distinguish new ownership from old ownership,
a new Property Tax file will be opened in the name of you,
your father and the personal representative / executor of
the estate of your mother. When the legal title is passed
to the beneficiary, another new Property Tax file will be
opened in the name of you, your father and that beneficiary
(if that person is some other person, say Ms C).
Two Property Tax returns will be issued for the year of assessment
2007/08. You should report the total rental income for the
period from 1.4.2007 to 1.8.2007 in the tax return for the
1st ownership, and the total rental income for the period
from 2.8.2007 to 31.3.2008 in the tax return for the 2nd ownership.
In the event that you and your mother were the only joint
owners of the property concerned, you, as the surviving owner,
will become the sole owner of the property on 2.8.2007. As
the rental income of any sole-owned property should be reported
in a Tax Return – Individuals (B.I.R.60), the rental
income from that property for the period from 2.8.2007 to
31.3.2008 should be reported in your own B.I.R.60.
|
| |
|
|
| |
|
|
|
How to report letting income
|
| 18. |
Q: |
My spouse and I had let out the
flat and carpark together to the same tenant at one lump sum
rental. However, I received two separate Property Tax Returns,
how should I fill in Part 4 of the Return? |
| |
|
|
| |
A: |
You must complete and submit both
Property Tax Returns. The rental income can be apportioned by
reference to the ratable values per demand for rates issued
by the Rating and Valuation Department. |
| |
|
|
| |
|
|
|
| 19. |
Q: |
My husband and I jointly own a
flat and a carpark. The flat is let for rental income and the
carpark is used for parking our own car. The Property Tax Return
shows the location of property as consisting of both the flat
and the carpark. How should we report this situation in the
tax return? |
| |
|
|
| |
A: |
When a flat and a carpark constitute
a single unit of property and it is partly let, the owner should
put a “”
in the box against “Yes” in the top portion of Part
4 and report the rental income of the flat in Part 4.2 of the
Return. |
| |
|
|
| |
|
|
|
| 20. |
Q: |
If the property is sub-divided
into several small units for letting, how should we report this
situation in the tax return? |
| |
|
|
| |
A: |
You have to sum up all the rental
income derived from letting of each small unit and report the
total rental income in Part 4.2 of the Return (B.I.R.57/58). |
| |
|
|
| |
|
|
|
| 21. |
Q: |
Our property was let for 9 months
only during the year of assessment 2007/08. It was vacant for
the period from August to October 2007. How should we report
this situation in the tax return for that year? |
| |
|
|
| |
A: |
You should put a " "
in the box against "Yes" in the top portion of Part 4 of the
Return, and then report the details of the rent. The number
of complete months to be stated in Part 4.1 is "9". You are
also required to state the periods of letting i.e. 1 April 2007
to 31 July 2007 and 1 November 2007 to 31 March 2008, and then
report the total rental income in Part 4.2 of the Return. |
| |
|
|
| |
|
|
|
| 22. |
Q: |
My brother and I own a property as
tenants-in-common. My brother let out his share of one room in our
flat. The remaining area is for my own use, how should we report
this situation in the tax return? |
| |
|
|
| |
A: |
Each and every joint owner or owner in-common is responsible for reporting rental income on tax returns and paying property tax. You should put a " " in the box against "Yes" in the top portion of Part 4 of the Return, and then report the rental income from letting that room in Part 4.2. |
| |
|
|
| |
|
|
|
| 23. |
Q: |
What is the meaning of "complete
months" in Part 4.1 of the Return? |
| |
|
|
| |
A: |
It is the round up figure of the
total number of months that the property was let. For example,
if the property had been let for altogether 8 months and 4 days
during the 12 months to 31st March, the number of complete months
to be stated in Part 4.1 should be ‘9’, and not
‘8’. |
| |
|
|
| |
|
|
|
| 24. |
Q: |
What is "lease premium"? |
| |
|
|
| |
A: |
Lease premium is a non-refundable
lump sum payment made by the tenant to the owner upon the signing
of the tenancy agreement. It is part of the consideration for
using the property and is chargeable to Property Tax. If the
period of the lease is not contained within any one year of
assessment, the owner should spread the lease premium into equal
monthly instalments over the period of the lease or a period of
3 years, whichever is the shorter, and include the relevant amount
as rental income for the years of assessment concerned.
|
| |
|
|
| |
|
|
|
| 25. |
Q: |
What is "rent recovered"? |
| |
|
|
| |
A: |
( see Question 27 ) |
| |
|
|
| |
|
|
|
How to claim deductible expenses/allowances
|
| 26. |
Q: |
We have to pay building management
fees and certain other out of pocket expenses for the property.
Are they deductible? Should we deduct them from the rental income
and report the net amount of the income? |
| |
|
|
| |
A: |
In Part 4.2 of the Return, you must
state the gross amount of rental income, without any deduction.
Otherwise, income may have been understated. |
| |
|
|
| |
|
Under the provisions of the Inland
Revenue Ordinance, only the following items are deductible under
Property Tax:
|
| |
|
|
1. Rates agreed to be paid and actually
paid by the owner; |
| |
|
|
2. A 20% statutory allowance for
repairs and outgoings; and |
| |
|
|
3. Irrecoverable rent. |
| |
|
|
| |
|
Hence, only rates paid by the owners
and irrecoverable rent can be claimed in Part 4.3 of the Return.
You should not claim any deduction for say Government rent,
building management fees, decoration expenses, repair expenses,
rent-collection fees, commission, insurance and mortgage interests
paid by you in Part 4.3 of the Property Tax Return. |
| |
|
|
| |
|
Deduction for mortgage interests
incurred on the acquisition of the property can only be claimed
by property owners who are eligible to and have elected for
Personal Assessment. Please refer to Questions 29 to 33 for
further information on how to claim tax relief under Personal
Assessment. |
| |
|
|
| |
|
|
|
| 27. |
Q: |
If the tenant
fails to pay rent, can I report the uncollected rent in Part
4.3(2) of the Return? |
| |
|
|
| |
A: |
You can claim deduction
only when the rent has become irrecoverable. If the tenant defers
the payment of the monthly rent and has not moved out, the uncollected
rent would unlikely be treated as irrecoverable rent. For the
year it becomes irrecoverable, you should state the annual rental
income, without deducting the irrecoverable rent in Part 4.2
of the Return. The amount of irrecoverable rent can be stated
in Part 4.3(2). If you have used the rental deposit to set-off
part of the uncollected rent, only the balance unrecovered by
you could be claimed as irrecoverable rent. Please note that
any sum previously deducted as irrecoverable should be treated
as income in the year of recovery and you should report it in
Part 4.2 of the tax return in the year of recovery. |
| |
|
|
| |
|
|
|
| 28. |
Q: |
My spouse and I own
a property is let out for rental income. Can we claim basic
or other personal allowances (such as child, dependent parent allowances)? |
| |
|
|
| |
A: |
Apart from the 20% statutory
allowance for repairs and outgoings, you cannot claim other
deductions under Property Tax. Please refer to Questions 29
to 33 for further information on how to claim personal allowances
for dependent family members under Personal Assessment. |
| |
|
|
| |
|
|
|
| How to claim tax
relief under Personal Assessment |
| |
| 29. |
Q: |
What
is the meaning of "Personal Assessment"? |
| |
|
|
| |
A: |
Under the Inland Revenue
Ordinance, there are 3 types of direct taxes, namely, Salaries
Tax, Profits Tax and Property Tax. Personal Assessment is not
a tax levy. It is a method of computation of tax (by combining
all 3 types of income) that may lighten the tax burden of certain
categories of taxpayers. If you wish to know more, please click
here. |
| |
|
|
| |
|
|
|
| 30. |
Q: |
How do
property owners apply for Personal Assessment? |
| |
|
|
| |
A: |
Individual property owners who are eligible for Personal Assessment election (click here for election requirements)
may indicate their wish to elect Personal Assessment
by stating their names and Hong Kong identity card numbers in
Part 5 of the Property Tax Return (B.I.R.57). If more than 2 owners wish to elect Personal Assessment, the additional owners can state their names and Hong Kong identity card numbers in the space below the boxes, or provide the particulars on a separate sheet.
Regular taxpayers usually receive their annual Tax Return
- Individuals (B.I.R.60) on/about the first working day of
May. To elect Personal Assessment, the elector should complete
Part 6 of his/her B.I.R.60.
However, if your total income is lower than your personal allowances,
which means that on election for Personal Assessment you do
not have to pay any tax, you only need to indicate your wish
to elect Personal Assessment in the Property Tax Return. The IRD may not send you a B.I.R.60
annually for completion, .
|
| |
|
|
| |
|
|
|
| 31. |
Q: |
I had already
elected Personal Assessment for past year(s), do I need to elect
Personal Assessment again for the year 2007/08? Would your Department
treat me as an elector for Personal Assessment automatically? |
| |
|
|
| |
A: |
Election of Personal
Assessment is voluntary and so you are required to make election
year-by-year. Please refer to Question 30 for further information
on how to claim tax relief under Personal Assessment. |
| |
|
|
| |
|
|
|
| 32. |
Q: |
My spouse and
I have salaries income of $200,000 and rental income of $80,000
from a jointly owned property during the year 2007/08. Should
we elect for Personal Assessment? |
| |
|
|
| |
A: |
If Personal Assessment
NOT elected
|
Computation of your tax
liabilities:
|
| |
|
Property Tax |
| |
|
Tax is charged at standard
rate (16% for the year 2007/08) on the net assessable value. |
| |
|
|
|
$ |
|
| |
|
Rental income |
80,000 |
|
| |
|
Less: 20% allowance
for repairs and outgoings |
16,000 |
|
| |
--------- |
| |
|
Net Assessable Value
(NAV) |
64,000 |
|
| |
--------- |
| |
|
Property Tax @16% |
10,240 |
|
| |
===== |
| |
|
|
|
| |
|
Salaries Tax |
|
| |
|
|
|
$ |
|
| |
|
Salaries income |
200,000 |
|
| |
|
Less: Married person's
allowance |
200,000 |
|
| |
---------- |
| |
|
Net chargeable income |
0 |
|
| |
---------- |
| |
|
Tax payable |
0 |
|
| |
====== |
| |
|
Total tax payable under
Property Tax and Salaries Tax is $10,240. |
| |
|
|
| |
|
If Personal Assessment
elected
|
| |
|
Computation of your tax
liabilities:
|
| |
|
|
|
$ |
|
| |
|
Salaries income |
200,000 |
|
| |
|
NAV of property |
64,000 |
|
| |
---------- |
| |
|
|
264,000 |
|
