Volume 18 Third Supplement

appellant appointed an attorney to handle her property before she emigrated — rentals received from the property — property tax was payable — but appellant had no actual knowledge of the returns sent — returns not submitted within the stipulated time limit — late returns submitted after a lapse of a few years — agreement on the assessable value of property reached — but the Revenue still levied additional tax for breaching s 51(1) and 51(2) without reasonable excuse —appellant claimed to be victim of the default of the attorney — non-receipt of tax return amounts to reasonable excuse under s 82A — plea of ignorance — personal duty to report — could not take refuge behind the alleged defaults on the part of the attorney — factors in favour of the appellant — factors against the appellant — quantum — additional tax should have been assessed in the light of similar decisions — ss 51(1)

fails to furnish a return in time — whether additional tax is excessive — ss 51(1), 59(3), 64(3) and 82A of the Inland Revenue Ordinance ("IRO"). [Decision in Chinese]  

late in submitting profits tax return — whether the lack of ability of appellant to pay penalty tax is a factor which should be taken into consideration — factors that affect the level of penalty - whether the assessments are excessive  

salary income omitted from return — whether additional tax is excessive — Penalty Loading Statement — ss 51, 68(4), 80(2), 82A & 82B(2) of the Inland Revenue Ordinance ("IRO") — Notice of Appeal — whether out of time — s 71(1) of the Interpretation and General Clauses Ordinance  

submission of incorrect tax return without reasonable excuse — attempt to claim dependent parent allowance and additional parent allowance — contradicted by facts — the claim was disallowed — imposition of additional tax assessments — claimed no intention to evade tax — merely forgot the passing away of his mother and habitually applied for dependent parent allowance — no reasonable excuse — the Revenue suffers no loss — no reasonable excuse but mitigating factor — but the mistake is just mere negligence — unlike those openly flout the rules and submit incorrect tax returns — the standard practice of imposing penalty equivalent to 100% of the tax underpaid as a starting point should not be applied — s 82A of the Inland Revenue Ordinance ("IRO"). [Decision in Chinese]  

assets betterment statement — ss 51C, 60 and 68(4) of the Inland Revenue Ordinance ("IRO")  

sale of a property — whether trading asset or capital asset — trading profit is chargeable to profits tax — ascertain the intention of the appellant at the time of the acquisition — intention to hold property as a capital investment must be definite — stated intention not decisive — actual intention must be determined objectively — onus of proof rests on appellant — analysis on the basis of the "badges of trade" as described in Marson v Morton — s 68(4) of the Inland Revenue Ordinance ("IRO")  

deductible expenses — maintenance deducted from salaries under court order — single parent allowance — predominant care — contribution to the maintenance and education — ss 12 and 32 of the Inland Revenue Ordinance ("IRO"). [Decision in Chinese]  

gain realised from exercise of share option — time for computation — whether matters personal to appellant relevant — s 9 of the Inland Revenue Ordinance ("IRO")  

income — whether rent refunds or cash allowances — whether artificial transactions — ss 9(1A) and 61 of the Inland Revenue Ordinance ("IRO")  

late appeal — whether being prevented from filing a timely notice of appeal — s 66(1A) of the Inland Revenue Ordinance ("IRO")  

s 26E of the Inland Revenue Ordinance ("IRO") — home loan interest allowance - whether interest attributable to that part of the loan used to pay premium deductible - to what extent is the appellant entitled to deduct interest paid to bank that is attributable to another bank loan  

s 8(1)(a), 8(1A)(b)(ii), 8(1A)(c) and 8(1B) of the Inland Revenue Ordinance ("IRO") — whether income arises in or is derived from Hong Kong — whether the taxpayer is entitled to the exemption under s 8(1A)(b)(ii), 8(1A)(c) and 8(1B) of the IRO. [Decision in Chinese]  

s 12(1) of the Inland Revenue Ordinance ("IRO") - whether or not professional indemnity insurance is incurred in the production of assessable income - whether or not the professional indemnity insurance is a deductible expense of a qualified solicitor  

termination of employment — whether payment in lieu of notice  

whether expenditure incurred for professional indemnity insurance is deductible for salaries tax purposes — claim for a deduction for expense incurred for annual professional subscription allowed as concession — Departmental Interpretation and Practice Note No 9, paragraph 17 (revised September 2002) — the Board cannot alter the basis on which deduction was allowed — comments on the inherent unfairness in the contrasting rules governing salaries tax and profits tax deductions — ss 12(1)(a) and 16(1) of the Inland Revenue Ordinance ("IRO")  

whether shares of employer company issued and allotted to its director to settle salary due chargeable to salaries tax — s 9 of the Inland Revenue Ordinance ("IRO")