ATO Interpretative Decision
ATO ID 2002/50 (Withdrawn)
Income Tax
Medicare Levy Surcharge - liability whilst overseasFOI status: may be released
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This ATO ID is a simple restatement of the law and does not contain an interpretative decision and the position stated in this ATO ID is no longer current.This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Is an Australian resident taxpayer liable to pay the Medicare Levy Surcharge (surcharge) imposed under section 8B of the Medicare Levy Act 1986 (MLA 1986) without reduction, where the taxpayer has been overseas for part of the year of income?
Decision
Yes. The taxpayer is liable to pay the surcharge as they were a resident for at least some time during (if not all) the year of income.
Facts
The taxpayer, who was single, suspended their private patient hospital cover while on 12 months leave overseas.
While overseas, the taxpayer did not have appropriate private patient hospital cover.
The taxpayer was not a 'prescribed person' as defined in section 251U of the Income Tax Assessment Act 1936 ( ITAA 1936).
The taxpayer was overseas during parts of 2 consecutive years of income.
Reasons for Decision
Paragraph 251S(1)(a) of the ITAA 1936 provides that a Medicare Levy is levied at the rate applicable in the MLA 1986 from the 1984 year of income onwards on the taxable income of a person who at any time during the year of income was a resident. The surcharge is also incorporated in the MLA 1986.
An unmarried person with no dependants is liable to pay a surcharge of 1 per cent on their taxable income and reportable fringe benefits under section 8B of the MLA 1986 if they are not a prescribed person as defined in section 251U of the ITAA 1936, they do not have an insurance policy providing 'private patient hospital cover' and their taxable income is greater than $50 000.
The taxpayer was an Australian resident, although not residing in Australia, during parts of the years of income that the taxpayer was overseas. As the taxpayer's taxable income exceeded $50 000 in each of the years of income, the surcharge will apply under paragraph 8B(2)(b) of the MLA 1986 for those days in each of the years of income that the taxpayer did not have the appropriate private patient hospital cover.
Year of income: Year ended 30 June 2000
Legislative References:
Medicare Levy Act 1986
section 8B
paragraph 8B(2)(b)
paragraph 251S(1)(a)
section 251U Related ATO Interpretative Decisions
ATO ID 2002/49
Keywords
Medicare levy surcharge
Australians overseas
ISSN: 1445-2782
| Date: | Version: | |
| 11 July 2001 | Original statement | |
| You are here | 30 April 2010 | Archived |