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Edited version of private ruling
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Ruling
Subject: Overseas medical expenses
Can the net medical expenses that you paid for treatment and surgery in an overseas hospital be included when calculating your medical expenses tax offset?
Yes.
This ruling applies for the following period
Year ended 30 June 2010
The scheme commenced on
1 July 2009
Relevant facts
You are an Australian resident. You were suffering from a severe illness.
As treatment was not immediately available in Australia you consulted a trained specialist overseas who advised he could offer a treatment protocol not available in Australia. You travelled overseas for this treatment which included two surgery admissions at a hospital.
You can substantiate the medical expenses you paid for treatment and surgery overseas and you do not intend to include travel expenses.
Relevant legislative provisions
Income Tax Assessment Act 1936 section 159P
Reasons for decision
Under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936) a tax offset is available to a resident taxpayer whose net medical expenses paid in the 2009-10 income year exceed $1,500. The tax offset is 20% of the net medical expenses exceeding $1,500.
Net medical expenses are the medical expenses a taxpayer has paid less any refunds they received, or could have received, from Medicare or a private health fund.
Paragraph 159P(4)(a) of the ITAA 1936 provides that payments to a legally qualified medical practitioner, nurse or chemist or a public or private hospital in respect of an illness or operation are medical expenses.
It is not necessary that the payments be made to a resident of Australia or that they are paid in Australia. Therefore, eligible medical expenses paid during an overseas trip may qualify for the tax offset. However meals, accommodation and travel expenses are incidental to obtaining the medical treatment and they would not meet the definition of medical expenses under subsection 159P(4) of the ITAA 1936.
In your case you received treatment including surgery at an overseas hospital. The costs of the treatment and surgery are eligible medical expenses and you are entitled to include the net expenses that you paid when calculating a medical expenses tax offset.
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