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Edited version of private ruling
Authorisation Number: 1011542566877
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Ruling
Subject: Medical expense tax offset
Question and answers:
Does the expense incurred in the purchase of a motor vehicle modified to provide wheel chair accessibility qualify as a medical expense for the purposes of a medical expense tax offset?
No.
Do the running costs associated with a motor vehicle modified to provide wheel chair accessibility qualify as a medical expense for the purposes of a medical expense tax offset?
No.
This ruling applies for the following period
Year ended 30 June 2009
Year ended 30 June 2010
The scheme commenced on
1 July 2008
Relevant facts
You have a medical condition which confines you to a motorised wheelchair.
You purchased a used motor vehicle which has been modified to accommodate a wheel chair bound passenger.
The motor vehicle has been purchased and used specifically and solely for your transport needs.
In addition to the cost of purchasing the vehicle, you have also incurred running costs associated with the vehicle.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 159P
Reasons for decision
A medical expense tax offset is available to a taxpayer under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936), where the taxpayer incurs medical expenses for themselves or a dependent who is an Australian resident. The tax offset is 20% of the amount by which the net medical expenses exceed $1,500.
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.
In your case, the modified motor vehicle that you have purchased is a means of private transport and retains its character for the purpose for which it is prescribed or used and that is a passenger vehicle. While it allows you to travel in your wheelchair in more comfort, safety and at your convenience it does not replace or alleviate an absent or impaired bodily function. Therefore, it is not considered an aid to function and capacity within the meaning of a medical or surgical appliance. The running costs associated with this vehicle are also not considered an aid to your function and capacity within the meaning of a medical or surgical appliance.
Accordingly, the expenses incurred by you in purchasing the modified motor vehicle and the running costs do not qualify as medical expenses for the purposes of a medical expense tax offset, under section 159P of the ITAA 1936.