Private ruling: WRE - other
Published: November 2013
Ruling period: Year ended 30 June 2013
Date scheme commenced: 1 July 2012

Ruling: Q1: Are you entitled to claim a deduction for the cost of having skin cancers cut out of your body? | A1: No.

Relevant facts and circumstances: You work as a travelling sales person. As a result of your job you are exposed to the sun. You have had to have skin cancers cut out of your body.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1

Reasons for decision: Summary: Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income except where the outgoings are of a capital, private or domestic nature, or relate to the earning of exempt income. In Ronbipon Tin NL v Federal Commissioner of Taxation (1949) 78 CLR 47; [1949] ALR 875; (1949) 23 ALJ 139, the High Court of Australia stated that in order for expenses to be allowable as deductions, the expenses must be incidental and relevant to the gaining of the assessable income. Whether this connection exists is a question of fact to be determined by reference to all the facts of the particular case. Generally medical expenses have no direct connection to the gaining or producing of assessable income. The expense relates to overcome a personal medical condition and is private in nature. There is insufficient connection to the gaining or production of assessable income for a deduction to be allowed as the expenditure is too remote. In your case, you had to have skin cancers cut out of your body as a result of being exposed to sun while travelling for work. In light of the principles outlined above, the costs of having your skin cancers cut out are private in nature. The expenses are not considered to be incurred in gaining your assessable income, but rather incurred in overcoming a medical condition. Therefore, you are not entitled to claim a deduction for this expenditure under section 8-1 of the ITAA 1997.