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Edited version of private ruling
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Ruling
Subject: Medical tax offset
Question and answer
Will you be entitled to a medical expenses tax offset for the cost of medical treatment obtained overseas?
Answer
Yes
This ruling applies for the following period:
30 June 2011
The scheme commences on:
1 July 2010
Relevant facts and circumstances
You are an Australian resident for tax purpose.
You have been diagnosed with a medical condition.
The preferred treatment for this condition is Radiotherapy.
This treatment has recently become available in Australia at a cost of $25,000.
The treatment is available in Overseas at a lesser cost.
The payment will be to the centre and relates purely to hospital treatment.
The amount does not include travel, accommodation and food cost.
You intend to go for this treatment this year.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 159P
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 the taxpayer incurs medical expenses in an income year for themselves or a dependant who is an Australian resident. The medical expense tax offset is 20% of the amount by which the net medical expenses exceed $2,000 for that income year.
Medical expenses are defined in 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.
While it is necessary that you must be a resident of Australia to qualify for the offset, it is not necessary that the payments be made to a resident of Australia or that they are paid in Australia.
You will be visiting the hospital overseas for treatment which is run by qualified medical practitioners. You will be making a payment to the centre for the operation. Therefore, the treatment you will receive in respect of your medical condition qualifies as a medical expense.
As your net medical expenses for the income year are expected to exceed $2,000, you are entitled to a medical expenses tax offset under section 159P of the ITAA 1936 for 20% of the amount by which the net medical expenses exceed $2,000.