Problem

Mr. Cheung is a HK resident who has been employed as an internal auditor by Mokia Ltd., a company
incorporated and carrying on business in HK. During the year ended 31 March 2016, Mr. Cheung has the following income and expenditure:

1. A monthly salary of $50,000 per month.

2. A bonus of $20,000, which was approved during a Board of Directors' meeting held on 15 March 2016, was received on 15 April 2016.

3. A meal allowance of $20,000 of which only $18,000 was actually expended.

4. During the year, Mr. and Mrs. Cheung went on vacation trip to Thailand. Mr. Cheung received a holiday passage from Mokia Ltd. in the sum of $6,000.

5. A reimbursement of medical expenses in the sum of $35,000 from Blue Cross Medicare Scheme. Mokia Ltd. paid an annual premium of $5,000 for each member of staff.

6. A company-owned car (worth $380,000) was provided to Mr.Cheung for his own use. In addition, Mr.Cheung was reimbursed $500 per month to cover his petrol cost.

7. During the period from 1 April 2015 to 30 June 2015, Mr. and Mrs. Cheung lived in a leased flat at a monthly rental of $30,000, out of which $25,000 was reimbursed by Mokia Ltd. With effect from 1 July 2015, Mr. and Mrs. Cheung moved into a newly acquired property in Wanchai. The property cost was $6 million and was financed by a low interest mortgage loan offered by Mokia Ltd. The commercial rate at that time was 3% p.a., and the rate offered by Mokia Ltd was 1% p.a. (Mr. and Mrs.Cheung will not claim home loan interest, if available.)

8. A domestic helper at an annual wage of $40,000 was employed by Mokia Ltd. and assigned to serve Mr.Cheung's family.

9. Mr. Cheung paid annual membership fees of the HKICPA of $2,000 and HK Jockey Club of $30,000.

10. Mr. Cheung made mandatory contributions of $18,000 to a MPF scheme.

11. On 1 June 2015, Mr. Cheung was granted an option to buy the shares of Mokia Ltd.'s parent company which was incorporated in Singapore. The option enabled Mr. Cheung to buy 7,000 shares at a price of $5 per share. On 1 September 2015, Mr. Cheung (i) exercised the option to buy 5,000 shares and (ii) sold the option to buy 2,000 shares to colleague for $43,000. Details of share market value were:

1 June 2015 $25
1 September 2015 $29
31 March 2016 $26

12.In order to equip himself with updated knowledge, Mr. Cheung enrolled for an evening course on China Auditing with the City University of Hong Kong and paid a tuition fee of $55,000.

Apart from the above, the following additional information is available:

13. Mrs. Cheung has a part-time job and earned $100,000 during the year. She made mandatory contributions of $5,000 to a MPF scheme. She does not have any other source of income or allowable expenditure.

14. Mr. and Mrs. Cheung maintain Mrs. Cheung's mother, aged 61, who is living with Mr. and Mrs. Cheung. Mrs. Cheung's father, aged 63, is currently living in the Mainland China but receives remittance from Mrs. Cheung regularly. Mr. Cheung has a father, aged 59, who was declared disabled by the Eastern Hospital during the year. He has submitted an application for the Government's Disability Allowance and approval was received in May 2015. From June 2011, he is staying in a registered Nursing Home in Hong Kong at a cost of $10,000 per month, which was paid by Mr.Cheung.

15. During the year, Mr. Cheung made various charitable donations in an aggregated amount of $200,000 to The Community Chest of Hong Kong.

Required:

Compute the net chargeable income of Mr. and Mrs. Cheung (i) under separate taxation and (ii) under joint assessment for the year of assessment 2015/16.