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Edited version of private ruling
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Ruling
Subject: Medical expenses tax offset
Question
Is the cost of a spa pool a medical expense for the purpose of calculating a medical expenses tax offset?
Answer: No.
Relevant facts
You have a medical condition.
Your doctor advised you that a spa pool/hydrotherapy can provide you with symptom relief.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 159P
Reasons for decision
A medical expenses tax offset is available under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936), where you incur medical expenses in an income year for yourself or a dependant who is an Australian resident. The medical expense tax offset is only available if the amount of medical expenses (reduced by any entitlement to reimbursement from a health fund or government authority) exceeds $1,500.00.
The medical expenses tax offset is 20% of the amount by which the net medical expenses exceeds $1,500.00.
The term 'medical expenses' is defined in subsection 159P(4) of the ITAA 1936 to include payments in respect of a medical or surgical appliance prescribed by a legally qualified medical practitioner, and for therapeutic treatment which has been administered by direction of a legally qualified medical practitioner. It also covers payments to doctors, nurses, chemists, dentists, opticians and optometrists, in respect of an illness or operation.
Taxation Ruling TR 93/34 explains the meaning of a 'medical or surgical appliance' as an instrument, apparatus or device which is manufactured as, distributed as, or generally recognised to be an aid to the function or capacity of a person with a disability or an illness. TR 93/34 also stipulates that generally, a household or commercial appliance is not a 'medical or surgical appliance'.
The question of whether the appliance is an aid to function or capacity looks at the character of the appliance and not the purpose for which the appliance is prescribed or used.
Paragraph 9 of TR 93/34 specifically excludes hydrotherapy pools, spa pools and swimming pools as items that are 'medical or surgical appliance'. Paragraph 26 of TR 93/34 states that the fact that an article has a therapeutic purpose does not mean that the article is a 'medical or surgical appliance'.
Consequently, the cost of installing a spa pool does not qualify for the medical expenses tax offset as the pool is not considered a medical or surgical appliance and is not a medical expense.
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