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Homework answers / question archive / WEALTH PROTECTION - TAX PLANNING  "Eagle Eye" is a practising lawyer and runs a sole-proprietorship law firm

WEALTH PROTECTION - TAX PLANNING  "Eagle Eye" is a practising lawyer and runs a sole-proprietorship law firm


WEALTH PROTECTION - TAX PLANNING  "Eagle Eye" is a practising lawyer and runs a sole-proprietorship law firm. She is a member of the Law Society. As a member of the Law Society, she is required to pay subscription fees amounting to $100 annually. She also subscribes to various journals and pays subscription fees of $500 a year.

In view of the depressed property market, she recently upgraded from a condominium to a semi-detached property and took up a loan to finance the purchase. She incurred $6,500 interest on her property loan.

 "Eagle Eye" has four children aged 9, 11, 15 and 22 as at 1st January 2019. "Eagle Eye's" eldest child is studying nuclear engineering in the UK on a $65,000 a year scholarship. This course is not available in Singapore and one of the conditions of the scholarship is that "Eagle Eye's" eldest child is not allowed to work in the UK.

"Eagle Eye" grossed $200,000 from her sole proprietorship business. She contributed $12 to SINDA and received $1,300 in interest ($500 from POSB and $800 from UOB Bank).



"Eagle Eye" is considering buying a brand-new car. The selling price of the brand-new car is $52,750 and there are 2 different payment schemes available to "Eagle Eye": 


Payment Scheme A

Payment Scheme B

Total cash payment of $52,750

Down payment = 20%

Balance at 3.5% per year simple

interest, payable in 3 years


"Eagle Eye" owns the following investment assets:


Asset Type

Treasury bonds

Local stocks

Foreign stocks

Amount Invested




Expected Returns





"Eagle Eye" and her husband "Kind Eye" live at Pine Grove Condominium, a leasehold property at Pine Grove Road. The property is registered under "Eagle Eye's" name.  

"Eagle Eye's" second sister, "Sharp Eye," who is 38 years of age, is a private banker with Supreme Bank.

"Eagle Eye" had written a Will prior to her marriage to "Kind Eye" and had nominated her parents as nominees for her CPF monies. Requirements

1(b)(i) Are "Eagle Eye's" subscription fees to Law Society and various journals deductible against her gross income? Why or why not?

1(b)(ii) Can "Eagle Eye" claim the interest expense (i.e. $6,500/-) incurred in respect of the property loan against her income from the sole proprietorship? Briefly explain your reason(s).  

1(c)(i) Calculate and illustrate "Eagle Eye's" child relief for Year of Assessment 2020?

1(c)(ii) Calculate and illustrate "Eagle Eye's" Year of Assessment 2020 tax payable.  


  2(a)(i) Calculate "Eagle Eye's" monthly instalment if she purchases the brand-new car using payment scheme B.

2(a)(ii) For the purchase of the brand-new car, calculate to demonstrate "Eagle Eye's" savings as a percentage of the selling price for Payment Scheme B if she chooses Payment Scheme A.                         

2(b)(i) What is the overall weighted average expected return on "Eagle Eye's" investments?

2(b)(ii) Briefly describe and explain the difference between "Capital protected funds" and "Capital

Guaranteed funds."                                                                                                     

2(c)   What is the difference between bonus shares and rights shares?                  


3(a)     Place a tick on the "YES" column if the statement is a characteristic of the Probate process.

1 A means of simplifying and expediting the transfer.  (Yes/No)

2 Provides a person or persons with the necessary authority to collect and distribute the deceased's assets on behalf of the estate.     (Yes/No)

3 Results in reduced administrative costs and other expenses associated with an estate.     (Yes/no)

4 Judicial supervision and approval minimise the possibility of future claims against the estate by heirs and creditors.     (Yes/No)

5 Provides notice of the deceased's death and estate proceedings to all interested parties so they may be barred from further challenge if they fail to respond in a timely fashion.     (Yes/No)

6 An orderly procedure for submission and payment of creditor's claims that bars claims if not filed within a specified period.      (Yes/No)

  7 Minimises the time required to transfer the deceased's property to beneficiaries.     (yes/no)

8 Provides for administration of the estate without publicity.     (yes/no)

9 A means of providing the validity of the deceased's will.      (yes/no)

10 Provides systematic administration (inventory, appraisal and accounting) of the deceased's estate.     (yes/no)

11 A means of documenting title to property of the deceased and the transfer of such title.  (yes/no)

12 Provides for orderly distribution and transfer of the deceased's property to beneficiaries.     (yes/no) 

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