Private ruling: Medical expenses tax offset
Published: May 2013
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you entitled to a medical expenses tax offset for the expenses relating to IVF treatment overseas? | A1: Yes.

Relevant facts and circumstances: You are an Australian resident. You incurred expenses for IVF treatment at an overseas clinic. You were referred to the clinic by a legally qualified medical practitioner in Australia who oversaw and monitored the treatment.

Relevant legislative provisions: Income Tax Assessment Act 1936 Section 159P

Reasons for decision: Summary: A medical expenses tax offset is available to a taxpayer under section 159P 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 Medicare or a private health fund. The medical expenses tax offset is 20% of the amount by which the net medical expenses exceed the threshold amount ($2,060 for 2011-12 year). Paragraph (a) of the definition of medical expenses in subsection 159P(4) of the ITAA 1936 includes payments made to a legally qualified medical practitioner, nurse or chemist, or a public or private hospital, in respect of an illness or operation. However, it is not necessary that the payments be made to a resident of Australia or that they are paid in Australia. Therefore, medical expenses paid during an overseas trip may qualify for the tax offset. 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 clinic in regards to IVF treatment. The procedure was undertaken by a legally qualified medical practitioner. Therefore, the payments made to the overseas clinic qualify as eligible medical expenses within the meaning of subsection 159P(4) of the ITAA 1936 and you are entitled to include the expenses in relation to the treatment in the calculation of the medical expenses tax offset.