Tim’s personal utility bills discussion

Question Description
Section 1 – Personal Information
 
(1) Tim Choi, HKID D987654(3); Grace Lam: HKID D123456(7). Both are HKPR.
 
(2) Tim and Grace are married with three children, Daniel and Maria, their biological children and Joy, their adopted children since 2015, with information below:
 
– Daniel Choi, HKID P604578(2), DOB May 2, 2002, unmarried and currently a full-time student at University of Manchester.
 
– Maria Choi, HKID R297364(3), DOB September 23, 2004, unmarried and currently studying Form 6 at a local secondary school. –
 
Joy Mohamed, HKID Q234123(4), DOB January 5, 2013, unmarried and currently studying Primary 6 at a local primary school.
 
(3) Tim and his family reside at Flat 36B, Windsor Court, 1 King Kwong Street, Happy Valley, Hong Kong . The apartment was rented by Tim since six years ago.
 
(4) Tim’s daytime phone number is 2825 1234 and Tim’s mobile is 6030 0030. Grace’s daytime phone number is 3535 8282 and her mobile number is 9027 0203.
 
(5) Grace is a housewife. She is the only child of her mother who lives in a registered nursing home called Heavenly Elderly Village in Shatin. The nursing home bills for the year amount to $150,000, which was paid by Tim. On top of this, Grace paid $2,000 per month to her mother as petty cash. Personal information about Grace’s mother is below: – Name: Ms Sin Ping Cheung; – DOB: April 7, 1935; – HKID: A308302(1)
 
(6) Tim’s parents are living away from the couple. Tim paid $10,000 per month to his parents. It has been agreed between Tim and his elder sister that the dependent parent allowance for the parents will be claimed by his elder sister.
 
(7) Tim has a disabled younger sister Tammy, aged 35 – Tim has maintained her throughout her life. Tammy is living in Hong Kong and taken care of by a domestic helper paid by Tim at $5,000 per month and lived in rented apartment paid by Tim at $15,000 per month.
 
Section 2 – Financial Information
 
(8) Tim is employed as chief executive officer by Resonance Ltd, a company carrying on trading business in Hong Kong since 1 May 2000. The following information relates to Tim concerning the year of assessment 2020/21:
 
(i) Salaries and commission of $2,400,000, subject to a deduction of 5% as his contribution to the mandatory provident fund (MPF)
 
(ii) Performance bonus for the year: a Rolex gold watch valued at HK$50,000. (iii) During the year, $90,000 was paid out of a discretionary trust set up by Resonance Ltd directly to University of Manchester for the tuition fees of Tim’s son, Daniel. (iv) Tim was granted an allowance of $48,000 in December 2020 for the purchase of a holiday passage, of which he spent $20,000 when he was on vacation leave in January 2021. He spent the remaining $5,000 buying souvenir and gifts for his colleagues during the trip.
 
(v) Tim’s personal utility bills were borne by Resonance Ltd, totaling $24,000 for the year.
 
(vi) Tim rented his current residence in Happy Valley for $40,000 per month and received full reimbursement from his employer as housing reimbursement. Tim has submitted the lease contract and rental receipts to his employer as evidence.
 
(vii) Resonance Ltd operates an employee share option scheme. On 1 November 2020, Tim was granted an option to buy 10,000 shares at a cost of $500. The exercise price is $30 per share. On 5 January 2021, he exercised the option to buy 5,000 shares and sold the option for the balance of the shares to another staff at $1,000. Tim sold all his shares on 10 January 2021. The market price of the shares was as follows: – $50 per share on 5 January 2021 – $60 per share on 10 January 2021
 
(viii) During the year, Tim had an accident and was hospitalized for two weeks. Total hospital bill was $100,000. Tim received full reimbursement from the insurance company for Resonance Ltd had a very good group medical insurance plan for their senior staff. Tim also paid extra $50,000 to upgrade his room from a semi-private room to a private room for more privacy. He did not get a reimbursement for this amount.