Edited version of private ruling

Authorisation Number: 1011631104989

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Ruling

Are the expenses you paid for on behalf of an egg donor as part of in-vitro fertilisation (IVF) treatment a medical expense for the purposes of the medical expense tax offset?

Yes.

This ruling applies for the following period

Year ended 30 June 2010

The scheme commenced on

1 July 2009

Relevant facts and circumstances

You commenced a round of IVF treatment.

This treatment involved the use of a donor egg.

You are responsible for the expenses of the donor in respect of the IVF treatment.

The medication that was required by the donor was purchased though the IVF clinic.

The treatment was delivered by a legally qualified medical practitioner.

All payments were made to a legally qualified medical practitioner or hospital.

Relevant legislative provisions

Income Tax Assessment Act 1936 Section 159P

Income Tax Assessment Act 1936 Subsection 159P(1)

Income Tax Assessment Act 1936 Subsection 159P(4)

Reasons for decision

A medical expenses tax offset is available to a taxpayer under subsection 159P(1) of the Income Tax Assessment Act 1936 (ITAA 1936) where the taxpayer pays medical expenses in an income year for themselves or a dependant who is an Australian resident, to the extent that they are not reimbursed, or are eligible to be reimbursed, from a government or public authority or a society, association or fund.

The medical expenses tax offset is 20% of the amount by which the net medical expenses exceed $1,500 for the 2009-10 income year.

The term medical expenses are defined in paragraph (a) of subsection 159P(4) of the ITAA 1936 to include payments to a legally qualified medical practitioner, nurse or chemist, or a public or private hospital in respect of an illness or operation.

Taxation Ruling IT 2359 states that infertility is an illness within the ordinary meaning of the term and payments to a legally qualified medical practitioner or hospital for treatment under an IVF program qualify as medical expenses.

In your case, you incurred expenses which were paid in relation to an egg donor as part of the IVF treatment. The procedure was undertaken by a legally qualified medical practitioner. Medication required by the donor was purchased from the IVF clinic.

Although the medical expenses were made on behalf of a person other than yourself or your dependant, this does not preclude the expenses from qualifying for the medical expenses tax offset. The cost of obtaining the donor eggs as part of IVF is considered to be a cost of the treatment to overcome infertility. 

Therefore, the payments made to a legally qualified medical practitioner in respect of an egg donor qualify as an eligible medical expense within the meaning of section 159P(4) of the ITAA 1936 and you are entitled to include the out of pocket expenses in your calculation of the medical expenses tax offset.

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