ATO Interpretative Decision
ATO ID 2002/852 (Withdrawn)
Income Tax
Medical expenses tax offset- modified car designed to carry a passenger seated in a wheelchairFOI status: may be released
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This ATO ID is withdrawn as the interpretative issue is covered in TR 93/34.This document incorporates revisions made since original publication.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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
Do expenses incurred by a taxpayer in purchasing a modified car capable of carrying a passenger seated in a wheelchair qualify as medical expenses for the purposes of claiming the medical expenses offset under section 159P of the Income Tax Assessment Act 1936 ('ITAA 1936')?
Decision
No. The expenses incurred by a taxpayer in purchasing a modified car capable of carrying a passenger seated in a wheelchair do not qualify as medical expenses for the purposes of claiming the medical expenses offset under section 159P of the ITAA 1936.
Facts
The taxpayer suffers from a medical condition that affects their ability to walk.
The taxpayer's doctor recommended the use of a modified car for their transport needs.
The taxpayer purchased a modified car that is capable of carrying a passenger seated in a wheelchair.
The car's modifications do not enable the taxpayer to drive the car.
Reasons for Decision
Subsection 159P(3A) of the ITAA 1936 provides that a tax offset is allowable to a taxpayer whose net medical expenses in the year of income exceed $1250.
The medical expenses must be paid by the taxpayer in respect of themselves or their dependant.
The term 'medical expenses' is defined in paragraph 159P(4)(f) of the ITAA 1936 to include payments in respect of a medical or surgical appliance prescribed by a legally qualified medical practitioner.
Taxation Ruling TR 93/34 describes a 'medical or surgical appliance' as being an instrument, apparatus or device which is manufactured, distributed or generally recognised as an aid to the function or capacity of a person with a disability or an illness.
Taxation Ruling TR 93/34 also provides that generally a household or commercial appliance is not a 'medical or surgical appliance' and that we need to look at the character of the appliance, not the purpose for which it is prescribed or used.
The modified car is a means of private transport and it retains its character as a passenger vehicle. While it allows the taxpayer to travel in their wheelchair in more comfort, safety and at their convenience it does not replace or alleviate an absent or impaired bodily function. It is not an aid to function and capacity within the meaning of a medical or surgical appliance.
The character of the modified car is not altered by the fact that its purchase was recommended by a legally qualified medical practitioner.
Consequently, the expenses incurred by the taxpayer in purchasing the modified car do not qualify as medical expenses for the purposes of section 159P of the ITAA 1936.
Date of decision: 15 August 2002Year of income: Year ended 30 June 2001
Legislative References:
Income Tax Assessment Act 1936
section 159P
subsection 159P(3A)
paragraph 159P(4)(f)
Related Public Rulings (including Determinations)
Taxation Ruling TR 93/34
Keywords
Medical expenses rebates
Motor vehicles
Cars for other disabled people
ISSN: 1445-2782
| Date: | Version: | |
| 15 August 2002 | Original statement | |
| You are here | 16 April 2010 | Archived |