Declaration and Fill Return Investment

Question: Describe about the Declaration and Fill Return Investment. Answer: Lecturing income of S$ 45,000. Lecturing income earned in a private institution in Singapore is income earned in Singapore. Though the income is deposited in a foreign bank account, it regarded as income earned for working in Singapore. Therefore, the income will be taxed and you will be required to make it declaration and fill return. Employment salary earned overseas is not taxed and there is no need to declare. The amount earned from Vietnam by Leonard is not income earned in Singapore though it was received in a Singapore Bank (Minns, 2010). The rental income earned from a property in Australia is only taxed in Australia .This is as a result of the Double Taxation Agreement between Australia and Singapore that remove incidences of individuals being taxed in both countries. The Big Sweep winning is not regarded as income, therefore it not taxed under the Inland Revenue Authority of Singapore. It does not require declaration. Tax liabilities for Leonard Ongs royalties income Amount earned S$52520 Less expense Printing and stationary $15500 Advertisements $ 8600 Legal fees $ 2480 Net income S$ 25940 10% of gross royalty income; 10% *52520= $ 5252 Leonard will pay S$5252 for the Royalties received in the year 2015 because they are lower compared to tax liabilities calculated as 22% of net income of royalties Leonard Income from rental properties for 2016; Rental income for property 1 Rental income $ 4500*12 =54000 Less allowable expenses Property tax 330*12= 3960 Maintenance fee 190*12= 2280 Repairs 1600 Taxable income 46160 Rental income for property 2 Rental income $ 3600*9= $ 32400 Less allowable expenses Property tax 280*9= 2520 Maintenance fee 130*9 = 1170 Renovation 15000 Taxable income $ 13710 Calculation for the share option benefit Bought option shares at S$ 3.50 on July Sold at S$ 5 Benefits [5-3.5]100000 = $ 150000 Tax relief for Leonard Ong Leonard is entitled to S$1000 tax relief for the income earned in Singapore. This relief is to respect of age that is allowed to all employees of age below 55 years. 2. I) In case Leonard contracts critical illness, both life term and whole life insurance policies will be used to payout but in specified sections. He will be paid S$700000 for contracting the illness from the Life term insurance policy. It is within this policy that Leonard has insured against contracting illness. The other policy from the Whole life insurance covers against critical illness only which can be associated with leading to contraction. In this case, he has suffered against accelerated critical illness that has been contracted and he will receive S$70000 pay out from the policy. Therefore, Leonard will receive S$770000 in total form both policies as a result of contracting. Both insurance policies will be valid to payout in this case. S$700000- for contacting major illness S$70000-for accelerated critical illness Total payout-S$700000+S$70000=S$770000 ii) In case Leonard dies in the next year, his beneficiaries will receive payouts from both insurance policies. Leonard will be compensated for both critical illness and for death occurrence. Therefore, they will receive a total of S$2472000 payout from all insurance policies on claim. Also the mortgage term insurance cover for the condominium will be paid out at a discount of 1.5% p.a. Both insurance companies will pay the sum assured since there is no breach of the life insurance policy (Reuvid, 2012). The Term insurance will pay S$ 800000 while the Whole life insurance will pay S$ 90000. S$700000- for contracting critical illness S$70000-for accelerated critical illness S$800000-for life term sum insured S$90000-for whole life sum insured S$812000-for loan insured S$800000+S$90000+S$70000+S$700000+S$812000=S$2472000 Annual compound rate of Leonard from 3 unit trust; Trust A bought 3.60 market value 3.0= -0.60= 3.00/3.60-1=-0.167 Trust B bought 4.70 market value 6.60= 6.60/4.70-1=0.40 Trust C bought at 5.30 market value 8.70= 8.70/5.30-1=0.64 Total compound benefits = -0.16+0.40+0.64=0.88 Percentage gain/ loss from Trust investments; Trust Unit A =3.00/3.60-1=-0.167*100= -16.7% Trust Unit B = 6.60/4.70-1=0.40*100= 40% Trust Unit C= 8.70/5.30-1=0.64*100=64% Total percentage = -16.7%+40%+64%= 88% 3. Though there no provisions in law for wifes maintenance duties toward her husband, in instances of death they exercise duties of maintenance. Wifes has a duty to pay debts and expenses that the husband is obliged to have. She is supposed to verify and settle them as they fall due. Secondly, wifes have a duty to take care of the properties that the husband had accumulated. It the duty of the wife to protect and maintain the existence and continuity of her husbands properties left behind at the time of death. Third, it is the duty of the wife to represent her husband in court cases that the husband left uncompleted. And the fourth duty is to distribute property to the husbands children as the trustee and custodian of the inheritance. The wife has the duty to divide the inheritance of her husband to the children when they reach age of the majority. The age can either be defined on the will or the legal majority age defined in the constitution. ii) Husbands are bound to wife maintenance in respect to terms agreements or court orders. Husband is required by law to maintain their wife and former wifes if divorced. The husband is required to maintain his former wife needs either as a lump sum or periodic. The needs are calculated on the financial needs of the former wife. If the wife has children, the husband is bound to maintenance till the children are of majority age. In most cases where the former wife is allowed share of marital assets by the court, the maintenance costs to the husband are reduced. Therefore, husbands are bound to the maintenance responsibility to their wife legally. In the case of Leonard, he is bound to maintain his former two ex- wives. He pays S$200 to the first wife and S$150 to the second wife as alimony for the marriage they shared with Leonard. b) Settlor- Leonard Ongs lawyer is the settler of the Trust. It is from this lawyer that the trust is legally bidding. He proposed the enactment of the trust. Therefore the lawyer is the settler of the Leonard Trust. Trustee- Koh Wai Eng is the Trustee of the Leonard Ongs Trust. She is the woman that Leonard was looking forward to marry on August. Koh Wai Eng is entrusted with the Leonards property for pay debts and expenses as they fall due. She is also entrusted with dividing the property to Leonards children when they turn 21year of age. Beneficiaries- kon Wai Eng who is also the trustee, is the current beneficiary. She will be privileged to own the properties for the years till Leonards children are of majority age. Lynette On, Bridget Ong and Daphne Ong are the beneficiaries of the Trust. Three who are children to Leonard are bestowed as beneficiaries of their fathers inheritance which they will get on attainment of 21 years of age. C). i) The Intestate Succession Act Chapter 146 section 7 will be used to distribute Leonard Ongs estate. Leonard did not leave a will but left a spouse and children. It is from this law that the estate of Leonard will be determined on how to be distributed among the beneficiaries. According to Baiross (2016), in absence of a will, law will take course to distribute estate in a predetermined equitable manner. ii) The following persons will be entitled to Leonard Estate; Kon Wai Eng, Lynette Ong Daphene Ong Bridget Ong Lynette Ong, Daphne Ong, Bridget Ong are the children of Leonard and will be entitled to half share of the estate (Tan Tan, 2011). According to the Intestate law, the spouse will take and the children the other of the total estates that were not indicated in a will. References Baiross, M. (2016). In the absence of a will, how is the deceased's estate distributed? | SingaporeLegalAdvice.com. SingaporeLegalAdvice.com. Retrieved 23 September 2016, from https://singaporelegaladvice.com/law-articles/in-the-absence-of-a-will-how-is-the-deceased-estate-distributed/ Beach, J. (2016). Singapore-Australia Double Taxation Agreement (DTA) | Brief Overview. Guidemesingapore.com. Retrieved 23 September 2016, from https://www.guidemesingapore.com/taxation/double-tax-treaties/singapore-australia-dta Deductions for Individuals (Reliefs, Expenses, Donations) - IRAS. (2016). Iras.gov.sg. Retrieved 23 September 2016, from https://www.iras.gov.sg/irashome/Individuals/Locals/Working-Out-Your-Taxes/Deductions-for-Individuals--Reliefs--Expenses--Donations-/ GAHVARI, F. (2014). Second-Best Taxation of Incomes and Non-Labor Inputs in a Model with Endogenous Wages. Journal Of Public Economic Theory, 16(6), 917-935. https://dx.doi.org/10.1111/jpet.12088 Intestate Succession Act. (2016). Nslegislature.ca. Retrieved 23 September 2016, from https://nslegislature.ca/legc/statutes/intestat.htm Joulfaian, D. Inheritance and Saving. SSRN Electronic Journal. https://dx.doi.org/10.2139/ssrn.909307 Minns, S. (2010). The 2010 guide to private banking and wealth management in Asia. London: Euromoney Institutional Investor PLC. Overseas Income Received in Singapore - IRAS. (2016). Iras.gov.sg. Retrieved 23 September 2016, from https://www.iras.gov.sg/IRASHome/Individuals/Locals/Working-Out-Your-Taxes/What-is-Taxable-What-is-Not/Overseas-Income-Received-in-Singapore/ Reuvid, J. (2009). The handbook of personal wealth management. London: Kogan Page. Reuvid, J. (2012). The handbook of personal wealth management. London: Kogan Page. Singapore Statutes Online - 146 - Intestate Succession Act. (2016). Statutes.agc.gov.sg. Retrieved 23 September 2016, from https://statutes.agc.gov.sg/aol/search/display/view.w3p;page=0;query=DocId%3A9ce463a4-f756-40c3-8503-9de6a25884c0%20%20Status%3Ainforce%20Depth%3A0;rec=0 Tan, C. Tan, C. (2011). Financial services and wealth management in Singapore. Singapore: Ridge Books.