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William was the marketing director of a trading company which carries business in Hong Kong. He received an annual salary of HK$700,000 for the year ended 31 March 2022.
In December 2021, William took a 10-days trip to Canada to visit his son who is now taking a full-time degree program in the University of Canada. He spent one afternoon to visit one of the major customers. He spent HK40,000 for the entire trip and his employer fully reimbursed him.
During the period from 1 April 2021 to 30 September 2021, he and his family lived in a hotel of two rooms which was rented for HK$20,000 per month by his employer. Starting from 1 October 2021 he and his family lived in a flat which was rented by him for HK$25,000 per month and his employer only reimbursed him HK$24,000 per month. Documentary evidence had to be submitted for the reimbursement.
During the year ended 31 Mach 2022, William made the following payment:-
1) Paid annual membership fee of HK$4,000 to Chartered Institute of Marketing
2) Donated two computers of HK$8,000 to the Red Cross
3) Paid MPF of HK$20,000
4) Paid care expenses of HK$110,000 to a registered care home for maintaining his grandfather who was 88 years old.
William has a son aged 22 and his wife is a housewife who stays in Canada to take care the son. William’s parents, both are aged 58, live with him throughout the year. William also maintains his wife’s parents, both aged 60, by contributing HK$30,000 to them during the year. His wife’s parents lived in a flat which was owned by him in China and he paid mortgage loan interest of HK$88,000 during the year ended 31 March 2022.
a) Calculate the salaries tax liability of William for the year of assessment 2021/22. (Ignore provisional tax and tax rebate)
b) Based on your answer in (a) above, explain your tax treatment regarding the 10-days trip of HK$40,000 to Canada.
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