Private ruling: Medical expense Tax Offset
Published: October 2012
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Are expenses in relation to medical procedures for you eligible medical expenses for the purposes of the medical expenses tax offset? | A1: Yes

Relevant facts and circumstances: You are an Australian resident for income tax purposes. You had treatment administered by a legally registered medical practitioner. The treatment was undertaken at a specialised clinic. You had expenses for various blood tests and other medical testing. The prescribed drugs administered in your treatment process were supplied by pharmacies. All of your expenses were paid by you or Medicare. You do not have private health insurance. You have provided copies of invoices listing all expenses for your treatment.

Relevant legislative provisions: Income Tax Assessment Act 1936 Subsection 159P(1) and | Income Tax Assessment Act 1936 Subsection 159P(4).

Reasons for decision: Summary: A medical expenses tax offset is available to a taxpayer under subsection 159P(1) of the Income Tax Assessment Act 1936 (ITAA 1936) where the taxpayer pays medical expenses in an income year for themselves or a dependant who is an Australian resident, to the extent that they are not reimbursed, or are eligible to be reimbursed, from a government or public authority or a society, association or fund. For the year ended 30 June 2012, the amount of the tax offset is 20% of the excess of net medical expenses over the threshold of $2,060. The term medical expenses is defined in subsection 159P(4) of the ITAA 1936, and includes payments to a legally qualified medical practitioner, nurse or chemist or a public or private hospital in respect of an illness or operation. Taxation Ruling IT 2359 provides that infertility is an illness within the ordinary meaning of the term and expenses associated with overcoming that illness are medical expenses. In your case, you made payments to an overseas fertility clinic in regards to treatment for yourself. The procedure was undertaken by a legally qualified medical practitioner and the medication required for the procedure was prescribed. It is accepted that the treatment you have received in overseas is in respect of the long term treatment program of the illness. The procedure was undertaken and blood tests organised by a legally qualified medical practitioner and medications were purchased from pharmacies. Therefore, the unreimbursed expenses you have paid in respect of the procedures qualify as eligible medical expenses under subsection 159(1) of the ITAA 1936, and can be included in the calculation of the medical expenses tax offset.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.