Jason Dompok, aged 34, is a Malaysian tax resident

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Jason Dompok, aged 34, is a Malaysian tax resident. He provided the following details

regarding his income for the basis year 2017:

Income from non-business sources:

i. Jason owns a house in Johore Bahru. He provides the following information for the

year ended 31 December 2017:

Income RM

January 2017 to May 2017 (RM3,000 per month) 15,000

June 2017 to August 2017 (vacant) Nil

September 2017 to December 2017 (RM3,200 per month) 12,800

Expenses

Refund of one month deposit to previous tenant 3,200

Commission to real estate agent for finding replacement tenant 3,200

Interest on loan (January 2017 to December 2017) 18,400

Quit rent and assessment 1,600

Repainting of the house 13,400

Porch extension 18,500

Fire insurance premium 1,600

ii. Dividends

a) On 14 July 2017, Jason received RM12,000 as dividends from Sarawak

Chemicals Bhd.

b) He also received the equivalent of RM10,300 in dividends on 28 November

2017 from shares invested in Hong Kong. Of this amount, only RM 7,000 was

remitted back to Malaysia as at 31 December 2017.

iii. Royalty

Royalty of RM62,000, was derived from Malaysia and was received during the year

for writing a book on Malaysian gardening. During the year, he incurred typing and

proof reading expenses of RM14,400.

Jason's wife, Eleanor a Malaysian tax resident, is a tailor and runs her business from home.

a) The net income from her business after deducting allowable expenses was

RM19,600.

b) As a part time real estate agent, Eleanor received commission of RM22,000 on sale

of properties in Malaysia.

c) She also received interest income of RM7,450 from Maybank in 2017 on her fixed

deposit account.

Jason and Eleanor provided the following additional information f for the year ended 31

December 2017:

4

Jason Eleanor

RM RM

Donations to approved institution:

? Cash 5,000 1,000

? Computer and school supplies to orphanage 2,400 -

Medical expenses incurred in respect of:

? complete medical examination (for Jason and

Eleanor)

570 980

? Daughter Barbara 26,600 -

Purchase of books and magazines 1,400 -

Insurance premiums:

? Life policy (life of Jason and Eleanor) 7,000 4,000

? Medical and education policy 5,100 -

Treadmill for family 4,500

Computer (replaced after 3 years) 4,500 -

The couple have three children:

a) The first son, Harry, aged 5, is studying in a kindergarten registered under the

Education Act 1996. Eleanor spent RM12,000 on his fees for the year.

b) The second daughter, Barbara, aged 4 is disabled. She had a heart operation

during the year due to a "serious disease".

c) Their youngest daughter, Diana is 1 year old and Eleanor spent RM1,200 on

breast feeding equipment.

Eleanor's mother is 70 years old and has no income of her own. She lives with them. She

was hospitalized during the year and Eleanor incurred medical expenses of RM9,300.

Required:

(a) Compute the income tax payable by Jason and Eleanor for the year of

assessment 2017. Eleanor is not electing for joint assessment, and would be

claiming all the child relief.

(24 marks)

(b) Based on the facts above, list three advantages to Jason and Eleanor in NOT

electing for joint assessment.

(6 marks)

[Total: 30 marks]