| Disclaimer This edited version has been archived due to the length of time since original publication.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: 1011737796883
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 fact 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
Question
Are you entitled to include medical expenses for your parent in a calculation for a medical expenses tax offset?
Answer
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
Your parent lives with you and you provide support to them.
Your parent receives a pension from Centrelink of more than the relevant adjusted taxable income (ATI) (formally known as separate net income) threshold in each year.
Your parent incurred costs for surgery which you paid for them.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 159P
Income Tax Assessment Act 1936 Section 159J
Reasons for decision
A medical expenses tax offset is available to a taxpayer under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936), where a taxpayer pays medical expenses for themselves or a dependant who is an Australian resident.
Subsection 159P(4) of the ITAA 1936 defines 'dependant' to include a person in respect of whom the taxpayer is entitled to a tax offset under section 159J of the ITAA 1936
Section 159J of the ITAA 1936 allows a dependant tax offset where a resident taxpayer contributes to the maintenance of a parent, spouse's parent or invalid relative.
In calculating an entitlement to a dependant tax offset under 159J of the ITAA 1936, the ATI of the dependant must also be taken into account. ATI includes salary and wages, pensions, including most exempt pensions, interest and dividends and other income received by the dependant. The ATI of the dependant reduces a claim for a dependant tax offset.
The ATI threshold for the 2008-09 income year is $1,583 and for 2009-10 it is $1,645. As your parent's income is more than the ATI threshold, this would exclude any claim for the dependant tax offset.
Consequently as you are not entitled to any dependant tax offset under section 159J of the ITAA 1936, the definition of dependant under subsection 159P(4) of the ITAA 1936 is not met and you are not entitled to include the medical expenses of your parent in your claim for a medical expenses tax offset.
Furthermore, while we accept that you provide support for your parent, the Commissioner does not have the discretion to treat your parent as a dependant for the purposes of calculating a medical expenses tax offset.