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Edited version of private ruling
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Ruling
Subject: Medical expenses tax offset
Question
Does the cost of egg collection and storage qualify as a medical expense for the purposes of calculating a 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
As the chances of falling pregnant in later years drop, you decided to have your eggs collected and frozen as you did not wish to have a child in your present circumstances.
Relevant legislative provisions
Income Tax Assessment Act 1936 Subsection 159P(1)
Income Tax Assessment Act 1936 Subsection 159P(4)
Reasons for decision
A medical expenses tax offset is available under subsection 159P(1) of the Income Tax Assessment Act 1936 (ITAA 1936) where you pay medical expenses in an income year for yourself or a dependant who is an Australian resident, to the extent that you are not reimbursed, or are eligible to be reimbursed, from a government or public authority or a society, association or fund.
The definition of 'medical expenses' in subsection 159P(4) of the ITAA 1936 includes payments to a legally qualified medical practitioner or a public or private hospital in respect of an illness or an operation.
The terms 'illness' and 'operation' are not defined in the income tax law. The terms are not technical and are to be given the meanings which are ordinarily given to them. The meaning of the term 'illness' was discussed by Taxation Board of Review No. 3 in Case Q21, 83 ATC 77: Case 85 26 CTBR(NS) 570. Dr Gerber expressed his understanding of the concept of illness in these words:
'Illness' is not defined in the Act. However, I do not accept that it is a term of art. Adopting a purposive construction, I find the term includes any condition marked by a pronounced deviation from the normal healthy state. If this is the correct view, 'illness' must include any disorder of body, function or systems.
Taxation Ruling IT 2359 states that infertility is accepted as an illness within the ordinary meaning of the term. However, in your case, you are not undertaking the treatment because you are infertile. Rather, the expenses are incurred because you wish to preserve your eggs until your circumstances change
The expenses were not in respect of an illness. Consequently, the expenses do not qualify as medical expenses and cannot be included as part of a calculation for a medical expenses tax offset.