CONFIDENTIAL 1 BA/JAN 2024/ FIN533

FACULTY OF BUSINESS AND MANAGEMENT

FINAL TEST

COURSE : PERSONAL FINANCIAL PLANNING

COURSE CODE : FIN533
FINAL TEST : JANUARY 2024
TIME : 2 HOURS

INSTRUCTIONS TO CANDIDATES

1. This question paper consists of five (5) questions. Answer ALL questions.

2. This question paper consists of an appendix on tax reliefs and tax schedule.

3. Answer ALL questions in English.

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

This final test consists of 13 printed pages

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QUESTION 1

Mr. Ammar has worked in the oil and gas industry as a chemical engineer for almost twenty
years. He lives with his wife and three children in a bungalow that he bought for RM 600,000
ten years ago. It is worth RM 900,000 today. He took a mortgage from MBB bank for twenty-
five years to buy the house and pays RM 3,800 monthly. The outstanding balance of the
mortgage is RM 700,000. In January 2023, he bought a brand-new Tesla and paid a down
payment of twenty percent from his savings account and the balance is financed with a hire
purchase from Affin Bank. The monthly installments for the car are RM 1,500.

Mr. Ammar’s gross monthly salary is RM 20,000 with EPF deductions of 11% and the
employer’s contribution of 12%. His monthly tax deduction is RM 2,000.

Below is the financial information for Mr. Ammar for the year ending December 2023.

Savings account - RHB RM 10,000

Joint account with his wife - BIMB RM 8,000
ASB (Dec 2023) RM 200,000
ASB dividend RM 16,000
EPF balance (Dec 2023) RM 450,000
AIA whole life policy monthly premium RM 400
Tabung Haji dividend RM 2,000
AIA cash value RM 8,000
Prudential BSN Warisan (Hibah) monthly premium RM 350
Credit card installments monthly RM 1,000
Credit card balance RM 6,000
Groceries monthly RM 1,000
Yearly home and car maintenance RM 10,000
Miscellaneous expenses monthly RM 400
Travel and vacation yearly RM 10,000
Wife and children's allowances monthly RM 2,000
Parents allowances monthly RM 1,000
Part time maid monthly RM 500
Zakat monthly RM 1,000
Tabung Haji (Dec 2023) RM 50,000
Tesla current market value RM 180,000
Purchase iPhone 15 pro max in January RM 6,000
iPhone current value RM 5,000
Volkswagen Passat (fully paid) market value RM 40,000
Tag Hauer watch RM 6,000
Private Retirement Scheme RM 50,000
Public Mutual Unit Trust RM 100,000

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Tesla loan balance RM 230,000

Atome (Buy now pay later) Due RM 4,000

a) Using the above information construct a statement of financial position as of 31st

December 2023 for Mr. Ammar.
(10 marks)

b) Using the information provided, construct a cash flow statement for the financial year
ending 31st. December 2023 for Mr. Ammar.
(10 marks)
c) Calculate and comment on the following ratios for Mr. Ammar:

i) Current ratio
ii) Liquid asset to take home pay
iii) Debt ratio
iv) Debt service coverage ratio
(10 marks)

d) Analyze the financial situation for Mr. Ammar in 2023:

i) Calculate and comment on Mr. Ammar savings rate in 2023.

ii) Comments on Mr. Ammar’s net worth and his cash flow situation.
iii) List four actions that can be taken by Mr. Ammar to improve his financial well-
being.
(10 marks)

QUESTION 2

Mr. Agustine is a senior engineer at Sime Darby Corporation. He earns RM22,750 per month.
Mr. Agustine owns 2 houses for rental purposes, one in Machang and the other one in
Ampang. Rental income per month is RM2,000 for each house. The rental expenses are
RM1,350 per annum for both houses.

Her wife, Puan Wahida is an accountant in Citibank Berhad. Her gross income is RM8,500
per month. Puan Wahida has been requested by her manager to work part-time every
weekend and she will be paid RM4,000 per month. Puan Wahida agreed to start in April 2022.
Both pay 11% of their salary to EPF. The monthly tax deductions for Puan Wahida and Mr.
Agustine are RM550 and RM1,500 respectively.

Their first child, Ali is currently studying Pharmacy in England while their second child, Aminah
who has married last year to Abdullah is pursuing study in Degree of Law at Universiti Islam
Antarabangsa Malaysia (UIAM) Gombak. Their third child, Arisa is also handicapped and
studying Degree in Accounting at Universiti of Malaya (UM). Their youngest, Yusuf, 3 years
old is in pre-school “Tadika Pasti” with monthly fees of RM350.

In June 2022, the couple visited Japan and stayed 3 nights at the Shibuya Hotel, Tokyo at a
cost of RM340 per night. In addition, Mr. Agustine has treated his family to a night stay for 2
rooms at Grand Hyatt Kuala Lumpur at a cost of RM1,200 per room for a KLCC view to
celebrate his promotion to senior engineer effective August 2022.

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Below are additional details of the couple.

Items Mr. Agustine Pn. Wahida

(RM) (RM)
Dividends from Tabung Haji 20,000 10,800
Parent medical expenses 4,700 6,200
Electric wheelchair for Aminah 4,200 -
Electric wheelchair for Arisa 4,200 -
Electric wheelchair for sister 3,600 -
Takaful health insurance premium per month 800 500
Prudential life insurance per month 400 250
Interest on fixed deposit that pays 1.5% per month 1,230 780
Accounting Journals - 1,200
Annually e-magazine subscriptions
- Auto Car 150 -
- Her World - 180
- Simply Her - 300
- Luxurious Magazine - 450
Education fees for sister 1,200 600
Vaccination for Yusuf - 800
Complete medical examination for family 3,000 -
Purchased Covid-19 detection kits thru Shopee - 240
UNIFI internet subscriptions for parents per annum 1,800 1,800
Annual contribution to Private Retirement Scheme 10,000 3,200
DIGI subscriptions (self) 2,400 2,400
Purchased laptop for Ali 5,000 -
Purchased I-pad for Yusuf - 2,200
Purchased golf set 3,500 2,000
Purchased breastfeeding equipment for Yusuf - 1,200
Donation to MAKNA 5,000 1,350
Donation to Tai Kiong (unauthorized organization) 250 100
Zakat on salary per year 16,500 3,600
Zakat Fitrah 176 -
SSPN deposit per year 7,500 5,200
SSPN withdrawal per year 500 500
Entrance fee to Aquaria KLCC - 200
Entrance fee to Zoo Negara 150
Entrance fee to Zoo Melaka 180

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a) Puan Wahida did not elect for joint assessment, and she wishes to claim child relief for
their last child. As a financial planner, you are required to calculate the tax payable by
Mr. Agustine only for the year assessment 2022.
(15 marks)

b) Explain any two (2) strategies that can be employed by Mr. Agustine to minimize his
tax payable to the government while ensuring compliance with tax regulations.

(5 marks)

QUESTION 3

a) Early September 2023, Mr. Aydan celebrated his 42-year birthday and realized that his
EPF savings balances were RM560,780 (Account 1) and RM305,660 (Account 2). He
plans to utilize his EPF accounts for both investments and withdrawals. His plans
included:

▪ To invest in AM Islamic Balanced Fund a sum of RM65,000 in September 2023

and in PMB Dana Bestari a sum of RM55,000 in January 2024 (His basic
savings requirement is RM101,000).
▪ To withdraw a sum of RM45,000 to finance his son's tuition fees in October
2023, who is pursuing his Degree in Accounting at Taylor’s University.
▪ Mr. Aydan is planning to pay for his father’s kidney surgery which is scheduled
in November 2023. The surgery will cost RM18,000.
▪ Mr. Aydan is also planning to perform his Umrah in Mecca in December 2023
and anticipated that the total cost of the Umrah package will be around
RM10,000.
▪ To make a withdrawal from his Account 2 to reduce his housing loan balance.

Mr. Aydan has approached you for advice on the following:

i. The maximum amount that Mr. Aydan can invest for both his investments.
ii. Compute the balance amount that Mr. Aydan has in his EPF account after the
intended investments.
iii. Determine the amount Mr. Aydan can withdraw from his EPF account to reduce
his housing loan balance. The housing withdrawal is his last priority.

(10 marks)

b) According to Belanjawanku by EPF, a senior couple needs RM3,090 per month for a
reasonable standard of living. Briefly discuss the importance of retirement planning.

(5 marks)
QUESTION 4

a) Briefly discuss the rationality for writing a will.

(5 marks)

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The following figure is for questions 4b and 4c

Figure 1

b) Mrs. Julia’s husband had died, leaving the deceased's inheritance worth RM4,000,000.
Besides, he had outstanding debt amounting to RM1,000,000. He left behind both his
parents, wife, and three (3) sons and two (2) daughters. Calculate the portion for each
of the beneficiaries in Ringgit Malaysia (to the nearest RM).
(6 marks)

c) Puan Normala passed away, leaving behind her mother, husband, one (1) daughter,
two (2) sons, and three (3) siblings’ sisters. Her estate inheritance such as unit trust
RM500,000, properties RM2,000,000 and EPF Savings amounted to RM500,000.
Determine the distribution amount for each beneficiary in Ringgit Malaysia (rounded to
the nearest RM).
(4 marks)

QUESTION 5

a) Discuss any two (2) strategies on how fintech can effectively help individuals manage
their personal finances effectively and efficiently.

(5 marks)
(6

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b) Explain how open banking differs from cryptocurrency in terms of its fundamental
purposes.
(5 marks)

END OF QUESTION PAPER

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APPENDIX

Year of Assessment 2022

No Individual Relief Types Amount (RM)

1 Individual and dependent relatives 9,000

Medical treatment, special needs and carer expenses for 8,000

2
parents (Medical condition certified by medical practitioner) (Restricted)

Purchase of basic supporting equipment for disabled self, 6,000

3
spouse, child or parent (Restricted)

4 Disabled individual 6,000

Education fees (Self):

i. Other than a degree at masters or doctorate level – Course of

study in law, accounting, islamic financing, technical,
7,000
5 vocational, industrial, scientific or technology
(Restricted)
ii. Degree at masters or doctorate level – Any course of study

iii. Course of study undertaken for the purpose of upskilling or

self-enhancement (Restricted to RM2,000)

Medical expenses on:

i. Serious diseases for self, spouse or child

6 ii. Fertility treatment for self or spouse

iii. Vaccination for self, spouse and child (Restricted to RM8,000

RM1,000)
(Restricted)

7 Expenses (Restricted to RM1,000) on:

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i. Complete medical examination for self, spouse or child

ii. COVID-19 detection test including purchase of self-detection

test kit for self, spouse or child

iii. Mental health examination or consultation for self, spouse or

child

Lifestyle – Expenses for the use / benefit of self, spouse or child

in respect of:

i. Purchase or subscription of books / journals / magazines /

newspapers / other similar publications (Not banned reading
materials)

ii. Purchase of personal computer, smartphone or tablet (Not for 2,500

8
business use) (Restricted)
iii. Purchase of sports equipment for sports activity defined
under the Sports Development Act 1997 and payment of gym
membership

iv. Payment of monthly bill for internet subscription (Under own

name)

Lifestyle – Additional relief for the use / benefit of self, spouse

or child in respect of:

i. Purchase of sports equipment for any sports activity as

defined under the Sports Development Act 1997 500
9a
ii. Payment of rental or entrance fee to any sports facility (Restricted)

iii. Payment of registration fee for any sports competition where

the organizer is approved and licensed by the Commissioner of
Sports under the Sports Development Act 1997

Lifestyle – Purchase of personal computer, smartphone or 2,500

9b tablet for own use / benefit or for spouse or child and not for
business use (Restricted)

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Purchase of breastfeeding equipment for own use for a child 1,000

10 aged 2 years and below (Deduction allowed once in every
TWO (2) years of assessment) (Restricted)

Child care fees to a registered child care center / kindergarten 3,000

11
for a child aged 6 years and below (Restricted)

Net deposit in Skim Simpanan Pendidikan Nasional (Net 8,000

12 deposit is the total deposit in 2022 MINUS total withdrawal in
2022) (Restricted)

4,000
13 Husband / wife / payment of alimony to former wife
(Restricted)

14 Disabled husband / wife 5,000

15a Each unmarried child and under the age of 18 years old 2,000

Each unmarried child of 18 years and above who is receiving

15b full-time education ("A-Level", certificate, matriculation or 2,000
preparatory courses).

Each unmarried child of 18 years and above that:

i. receiving further education in Malaysia in respect of an award

of diploma or higher (excluding matriculation/ preparatory
courses).

ii. receiving further education outside Malaysia in respect of an

15b 8,000
award of degree or its equivalent (including Master or
Doctorate).

iii. the instruction and educational establishment shall be

approved by the relevant government authority.

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Disabled child 6,000

15c Additional exemption of RM8,000 disable child age 18 years old

and above, not married and pursuing diplomas or above
qualification in Malaysia @ bachelor degree or above outside 8,000
Malaysia in program and in Higher Education Institute that is
accredited by related Government authorities

Life insurance and EPF

i. Pensionable public servant category who do not contribute to

EPF or any approved scheme

● Life insurance premium

7,000
16 OR
(Restricted)
ii. OTHER than 16(i) category

● Life insurance premium (Restricted to

RM3,000)
● Contribution to EPF / approved scheme
(Restricted to RM4,000)

3,000
17 Deferred Annuity and Private Retirement Scheme (PRS)
(Restricted)

3,000
18 Education and medical insurance
(Restricted)

350
19 Contribution to the Social Security Organization (SOCSO)
(Restricted)

1,000
20 Domestic tourism expenses on:
(Restricted)

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i. Payment of accommodation at the premises registered (Click

here) with the Commissioner of Tourism under the Tourism
Industry Act 1992

ii. Payment of entrance fee to a tourist attraction

iii. Purchase of domestic tour package through a licensed travel

agent registered with the Commissioner of Tourism under the
Tourism

iv. Industry Act 1992

Expenses on charging facilities for Electric Vehicle (Not for 2,500

21
business use) (Restricted)

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Assessment Year 2022

Category Chargeable Income Calculations (RM) Rate Tax(RM)

%

A 0 - 5,000 On the First 5,000 0 0

B 5,001 - 20,000 On the First 5,000 1 0

Next 15,000 150

C 20,001 - 35,000 On the First 20,000 3 150

Next 15,000 450

D 35,001 - 50,000 On the First 35,000 8 600

Next 15,000 1,200

E 50,001 - 70,000 On the First 50,000 13 1,800

Next 20,000 2,600

F 70,001 - 100,000 On the First 70,000 21 4,400

Next 30,000 6,300

G 100,001 - 250,000 On the First 100,000 24 10,700

Next 150,000 36,000

H 250,001 - 400,000 On the First 250,000 24.5 46,700

Next 150,000 36,750

I 400,001 - 600,000 On the First 400,000 25 83,450

Next 200,000 50,000

J 600,001 - 1,000,000 On the First 600,000 26 133,450

Next 400,000 104,000

K 1,000,001 - 2,000,000 On the First 1,000,000 28 237,450

Next 1,000,000 280,000

L Exceeding 2,000,000 On the First 2,000,000 30 517,450

Next ringgit ………

END OF APPENDIX

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