| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of private ruling
Authorisation Number: 1011688384088
This edited version of your ruling will be published in the public Register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fac sheet has more information.
Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns.
Ruling
Subject: Medical expenses tax offset
Questions
1. Can you include the direct costs of stem cell therapy in your calculation of the medical expenses tax offset?
Answer: Yes.
2. Can you include the travel and accommodation expenses incurred in order to obtain stem cell therapy in your calculation of the medical expenses tax offset?
Answer: No.
This ruling applies for the following period
Year ended 30 June 2011
The scheme commenced on
1 July 2010
Relevant facts and circumstances
In a recent year your spouse was diagnosed with a degenerative health condition.
Your spouse's health has rapidly deteriorated since the diagnosis.
You researched Stem Cell Therapy treatments and presented your research to your spouse's doctor.
Their doctor agreed that it could be beneficial for the degenerative health condition and advised you to contact an overseas treatment centre.
The treatment centre is a private clinic group and institute for regenerative medicine.
There is no facility in Australia that provides the treatment.
You contacted the facility and forwarded all of your spouse's medical records.
The clinic evaluated your spouse's condition and they were accepted for treatment.
The procedure involved the collection of bone marrow and the reimplantation of stem cells back into the body through lumbar puncture.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 159P
Income Tax Assessment Act 1936 Section 159P(4)
Reasons for decision
A medical expenses tax offset is available under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936). To qualify for the rebate, the medical expenses must be paid by a resident taxpayer in respect of themselves or a resident dependant. However, it is not necessary that the payments be made to a resident of Australia or that they be paid in Australia. Therefore, medical expenses paid during an overseas trip may be included in the calculation of the tax offset.
Accordingly, you may be entitled to a medical expenses offset if the expenses are medical expenses for the purposes of section 159P of the ITAA 1936.
The term "medical expenses" is defined in subsection 159P(4) of the ITAA1936.
Paragraph 159P(4)(a) of the ITAA 1936 provides that payments to a legally qualified medical practitioner, nurse or hospital in respect of an illness or operation are 'medical expenses'.
Paragraph 159P(4)(d) of the ITAA 1936 provides that payments for therapeutic treatment administered by direction of a legally qualified medical practitioner are also 'medical expenses'.
In your case you made a payment to an overseas clinic for stem cell therapy for your spouse. Your spouse suffers from disease and the treatment was performed in relation to this illness. As the treatment was performed by a legally qualified medical practitioner and was in respect of an illness, the direct expenses of the medical treatment received by the overseas clinic qualify as medical expenses and can be included in your calculation of the medical expenses tax offset.
Travel expenses
In order for meals, accommodation and travel expenses to qualify for the tax offset they must also fall within the definition of medical expenses.
These expenses are not paid to a medical practitioner or hospital as required by paragraph 159P(4)(a) of the ITAA 1936. (17 TBRD Case S47; (1967) 13 CTBR Case 54) Nor are they paid for any therapeutic treatment as required by paragraph 159P(4)(d) of the ITAA 1936. (18 TBRD Case T56; (1968) 14 CTBR Case 78)
Although the meals, accommodation and travel expenses are incidental to obtaining the medical treatment they would not meet the definition of medical expenses under subsection 159P(4) of the ITAA 1936.
You are therefore not entitled to include expense for meals, accommodation and travel expenses as they are not medical expenses for the purposes of section 159P of the ITAA 1936.