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Subject: Medical expenses tax offset
Question
Are you entitled to include the expenses of an operation you underwent in your claim for a medical expenses tax offset?
Answer
Yes.
This ruling applies for the following period
Year ended 30 June 2011
The scheme commenced on
1 July 2010
Relevant facts
Previous generations of your family have had a form of disease, and you chose to have a genetic test over four years ago to discover if you had the disease gene.
The positive result of your test prompted you to have regular check ups with your surgeon, first annually, then six monthly. As a result of gradually worsening signs risk reducing surgery was recommended by your surgeon.
In the 2011 income year you had an operation.
The procedure you underwent was not cosmetic, but was described by your surgeon as a clinical, medically indicated procedure undertaken to reduce a quantifiable and potentially devastating risk.
Your expenses exceeded the threshold for medical expenses tax offset after reimbursment by your medical insurer.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 159P(4) and
Income Tax Assessment Act 1936 Subsection 159P(3A).
Reasons for decision
Subsection 159P(3A) of the Income Tax Assessment Act 1936 (ITAA 1936) provides that a tax offset is allowable to a taxpayer whose medical expenses (reduced by any entitlement to reimbursement from a health fund or government authority) in the year of income exceed the threshold, which for the 2011 income year is $2,000.
The medical expenses tax offset is 20% of the amount by which the net medical expenses exceed the threshold for the income year.
The medical expenses must be paid by the taxpayer in respect of themselves or their dependant.
The term 'medical expenses' is defined in section 159P(4) of the ITAA 1936. Paragraph (a) of the definition includes payments made to a legally qualified medical practitioner ... in respect of an illness or operation.
A medical expenses tax offset is available under subsection 159P(1) of the ITAA 1936 where you incur eligible 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.
You had an operation. It is accepted that this is an operation as required by section 159P(4) of the ITAA 1936.
Therefore, the expenses qualify as eligible medical expenses for the purposes of the medical expenses tax offset.