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Ruling
Subject: Medical expenses tax offset
Question
Can you include the cost for the purchase and installation of a residential lift as part of a calculation for a claim for medical expenses tax offset?
Answer
No
This ruling applies for the following period:
Year ended 30 June 2012
The scheme commences on:
1 July 2011
Relevant facts and circumstances
You suffer a number of medical problems.
You installed a specific external residential lift in your home so that you can remain and live at home.
The lift was installed GST-exempt.
The manufacturer displays items for people with disabilities.
The lift is advertised as a residential lift by the manufacturer.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 159P.
Reasons for decision
Summary
You are not entitled to include the cost for the purchase, installation and maintenance of your lift in a calculating for a medical expenses tax offset as it is not considered to be a medical or surgical appliance.
Detailed reasoning
A tax offset is available to you under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936), where you pay medical expenses in an income year for you or a dependant who is an Australian resident.
The medical expense tax offset is only available if the amount of medical expenses (reduced by any entitlement to reimbursement from a health fund or government authority) in an income year exceeds $2,060. The tax offset is 20% of the amount by which the net medical expenses exceed $2,060 for that income year.
Subsection 159P(4) of the ITAA 1936 defines 'medical expenses to include 'payments made in respect of a medical or surgical appliance prescribed by a legally qualified medical practitioner'.
According to TR 93/34, a 'medical or surgical appliance' for the purposes of paragraph (f) of the definition of 'medical expenses' in subsection 159P(4) is an instrument, apparatus or device which is:
a) manufactured as; or
b) distributed as; or
c) generally recognised to be an aid to the function or capacity of a person with a disability or illness.
Taxation Ruling TR 93/34 explains at paragraphs 15 that:
'For an item to be a medical or surgical appliance, it must be an aid to function or capacity (Ildes ATC at 4216; ATR at 954). This test looks to the character the appliance, not the purpose for which it is prescribed or used. It is not sufficient that a medical practitioner prescribes an appliance for medical or surgical ends
TR 93/34 then lists examples of articles which are considered to be or not to be 'medical or surgical appliances.' At paragraph 9(i), TR 93/34 lists ' lifts for conventional commercial or household use' as not being a 'medical or surgical appliance.'
The Tax Office has previously advised that a personal lift is considered to be a medical or surgical appliance. However, in that case, the lift was specifically manufactured, sold specially and generally recognised as an aid to those people who have mobility impairment.
In this case, the lift has not been manufactured, sold specially and or generally recognised as an aid to those people who have a mobility impairment. While the lift has features that may assist a person with a disability, its primary function is to transport up to two people, with or without disabilities, from one level of the home to another, that is, a residential lift. As such, it is not considered to be a medical or surgical appliance. Therefore, you are not entitled to include the costs in a calculation for a medical expenses tax offset