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Ruling

Subject: Tax offsets - Medical Expenses

Question

Can the costs associated with your medical procedure be included as a medical expense for the purpose of calculating a medical expenses tax offset?

Answer

Yes.

This ruling applies for the following period

Year ended 30 June 2011

The scheme commenced on

1 July 2010

Relevant facts

The arrangement that is the subject of the private ruling is described below. This description is based on the following documents. These documents form part of and are to be read with this description. The relevant documents are:

Due to your medical condition you have paid for the medical costs and expenses for another person who is assisting you with your treatment.

This payment was made on June 2011, with the transfer of funds to a clinic in country A and the signing of the recipient contract.

All procedures are performed by the clinics own specialists they are then monitored on site and then shipped out.

You will have the resulting treatment transferred to yourself in a procedure performed by your specialist, who is a qualified medical practitioner here in country B.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 159(P)

Reasons for decision

Summary

You are entitled to include the costs associated with your treatment in calculating your medical expenses tax offset.

Detailed reasoning

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 $2000 for the 2010-11 income year.

Medical expenses are defined in paragraph 159P(4)(a) 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 related to your medical condition. The cost of obtaining this treatment can be in included as a medical expense for the purpose of calculating a medical expenses tax offset, as these procedures were performed by legally qualified medical practitioners.

Therefore, you are entitled to include these expenses as a medical expense for the purpose of calculating a medical expenses tax offset?

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