Hi, there is a question about Hong Kong taxation.
Question 1 (Calculation of Industrial Building Allowance)
TT Ltd is a manufacturer of plastic products in Hong Kong. It prepares its accounts to 31 October each year. On 1st May 2006, it purchased a factory from a developer of properties for sale at a total cost of HK$7,200,000. The total cost incurred by the developer was HK$3,600,000 (including land cost of HK$1,200,000 and cost of construction of HK$2,400,000). After acquisition, TT Ltd, incurred decoration expenditure of HK$500,000 before it was put for its manufacturing use on 1st July 2006. On 1st February 2008, TT Ltd sold the property to EU Ltd for HK$6,000,000. EU Ltd started to use the property on 15th February 2008 for manufacturing purposes after incurring decoration expenditure of HK$800,000. EU Ltd prepares its accounts to 31st March each other.
REQUIRED: (i) Compute theIndustrial Building Allowance(IBA) (including balancing charge, if any) that TT Ltd is entitled to claim for each of the three years of assessment 2006/07 to 2008/09.
(ii) Compute theIndustrial Building Allowance(IBA) that EU Ltd is entitled to claim for each of the years of assessment 2007/08 to 2008/09. Show all your workings. (15 marks)