A T O home
Legal Database
Search   
for 
 
Access the database 
Browse database
Searches  
View last document
Quick access 
View legislation
View a document
Email Cross Reference Material Previous/Next Section Contents Previous/Next Result
Printable version
Printable
version

ATO Interpretative Decision

ATO ID 2001/669

Income Tax
Medical expenses tax offset - purchase of donor sperm from overseas

Attention This ATO ID is amended to remove reference to superseded dollar threshold amount and to reconcile current terminology ('tax offset') with legislative wording of section 159P of the ITAA 1936.
Attention This document has changed over time. View its history.

Status of this decision: Decision Current

CautionCAUTION: 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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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.


Issue

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)?

Decision

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.

Facts

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.

Amendment History

Date of amendment Part Comment
31 January 2014 Issue, Reasons for Decision, Keywords Amended for clarity.
  Facts Amended for style adherence.

Date of decision: 5 October 2001

Legislative References:
Income Tax Assessment Act 1936
   section 159P
   subsection 159P(3A)
   subsection 159P(4)

Related Public Rulings (including Determinations)
IT 2359

Keywords
Deductions & expenses
Medical expenses
Medical expenses rebates
Rebates and offsets

Date of publication: 30 November 2001

ISSN: 1445-2782

ATO ID 2001/669 history   Top  
   Date   Version 
    5 October 2001   Original statement   
 You are here ®  31 January 2014   Updated statement   


 


Top of page
More information on page