Answer Happy

Question 3 (15 marks) Ms. White is a Singapore resident who came to Hong Kong in September 2021 for holiday. She was introduced by a Hong Kong property agent to visit a commercial property in Tsim Sha Tsui East. The property was owned by a Hong Kong company, A Ltd, which is wholly owned by Mr. Chan. Ms. White acquired the property in her own name in October 2021 in HK$18 million. She settled 70% of the acquisition cost by cash and financed the balance with a 1-year loan from a bank. After the acquisition, Ms. White returned to Singapore and placed the property for sale with a few Hong Kong property agents for HK$21 million, In November 2021, a buyer was found and the property was sold at $21 million. Ms. White did not report the gain on disposal of $3 million in her tax return. She had entered into similar transactions of buying and selling another two commercial properties in Hong Kong in 2018 and 2020 respectively Required: (a) Comment on the difference in stamp duty implications by comparing Ms. White's acquiring the property in her own name; with the alternative of acquiring the shares in A Ltd (Note: calculation of the amount of stamp duty payable is not required.) (6 marks) Explain whether the gain on disposal of Ms. White's property in November 2021 is likely subject to Hong Kong profits tax. (9 marks) (b) [Total for Question 3: 15 marks)