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Do meals, accommodation and travel expenses associated with the treatment of an illness at an overseas medical clinic qualify as 'medical expenses' for the purposes of section 159P of the Income Tax Assessment Act 1936 (ITAA1936)?

No, the meal, accommodation and travel expenses do not qualify as medical expenses for the purposes of section 159P of the ITAA 1936.

The taxpayer intends to go to an overseas clinic for treatment of an illness.

The taxpayer expects to incur meal, accommodation and travel expenses in order to attend the clinic for treatment.

The taxpayer was referred to the overseas clinic by an Australian medical practitioner because the treatment provided by the overseas clinic is not available in Australia.

The overseas clinic is run by medically qualified doctors and nurses.

A medical expenses rebate is available under section 159P of the ITAA 1936. To qualify for the rebate, 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. Therefore, medical expenses paid during an overseas trip may be rebatable.

Accordingly, the taxpayer may be entitled to a medical expenses rebate if the expenses are medical expenses for the purposes of section 159P of the ITAA 1936.

The term "medical expenses" is defined in subsection 159P(4) of the ITAA1936.

Paragraph 159P(4)(a) of the ITAA 1936 provides that payments to a legally qualified medical practitioner, nurse or hospital in respect of an illness or operation are 'medical expenses'.

Paragraph 159P(4)(d) of the ITAA 1936 provides that payments for therapeutic treatment administered by direction of a legally qualified medical practitioner are also 'medical expenses'.

Direct expenses of the medical treatment received at the clinic would qualify as medical expenses and would be rebatable.

In order for meals, accommodation and travel expenses to qualify for the rebate they must also fall within the definition of medical expenses.

These expenses are not paid to a medical practitioner or hospital as required by paragraph 159P(4)(a) of the ITAA 1936. (17 TBRD Case S47 ; (1967) 13 CTBR Case 54 ) Nor are they paid for any therapeutic treatment as required by paragraph 159P(4)(d) of the ITAA 1936. (18 TBRD Case T56 ; (1968) 14 CTBR Case 78 )

Although the meals, accommodation and travel expenses are incidental to obtaining the medical treatment they would not meet the definition of medical expenses under subsection 159P(4) of the ITAA 1936.

The taxpayer is therefore not entitled to claim a medical expense rebate in relation to meals, accommodation and travel expenses as they are not medical expenses for the purposes of section 159P of the ITAA 1936.