ATO Interpretative Decision
ATO ID 2001/669
Medical expenses tax offset - purchase of donor sperm from overseas
||This ATO ID is amended to remove reference to superseded dollar threshold amount and to reconcile current terminology ('tax offset') with legislative wording of section 159P of the ITAA 1936.
||This document has changed over time. View its history.
Status of this decision: Decision Current
|CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.|
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Is the cost of purchasing donor sperm from an overseas supplier a medical expense for the purposes of the medical expenses tax offset under section 159P of the Income Tax Assessment Act 1936 (ITAA 1936)?
Yes. The cost of purchasing donor sperm from an overseas supplier is a medical expense for the purposes of the medical expenses tax offset under section 159P of the ITAA 1936.
The taxpayer suffers from infertility problems.
The taxpayer received In Vitro Fertilization (IVF) treatment from a reproductive medicine unit run by legally qualified medical practitioners.
The taxpayer required donor sperm for the purposes of the IVF treatment.
The donor sperm was obtained from an overseas Sperm Bank which is a medical practice run by legally qualified medical practitioners.
The taxpayer incurred expenses for the IVF treatment which included the fees paid to the Sperm Bank for the use of the donor sperm.
The cost of the IVF treatment exceeded the threshold dollar amount in subsection 159P(3A) of the ITAA 1936.
Reasons for Decision
Section 159P of the ITAA 1936 provides that a taxpayer is entitled to a rebate of tax (medical expenses tax offset) if the taxpayer's net medical expenses in the year of income exceeds the threshold dollar amount specified in subsection 159P(3A).
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 in respect of an illness or operation as medical expenses.
To qualify for the tax offset the medical expenses must be paid by a resident taxpayer in respect of themselves or a resident dependant. However it is not necessary that the payments be made to a resident of Australia or that they be paid in Australia.
Taxation Ruling IT 2359 states that infertility is an illness within the ordinary meaning of the term and payments to a legally qualified medical practitioner or hospital for treatment under an IVF program qualify as medical expenses.
The taxpayer received IVF treatment in respect of their infertility. As part of this treatment the taxpayer required the use of donor sperm. The cost of obtaining the donor sperm is part of the cost of the IVF treatment. All of the payments with regard to the IVF treatment, including obtaining the donor sperm, were made to a legally qualified medical practitioner. The expenses therefore qualify as medical expenses for the purposes of calculating the medical expense tax offset under section 159P of the ITAA 1936.
|Date of amendment
|31 January 2014
||Issue, Reasons for Decision, Keywords
||Amended for clarity.
||Amended for style adherence.
Date of decision: 5 October 2001
Income Tax Assessment Act 1936
Related Public Rulings (including Determinations)
Deductions & expenses
Medical expenses rebates
Rebates and offsets
Business Line: Small Business/Individual Taxpayers
Date of publication: 30 November 2001
|ATO ID 2001/669 history