Medical tax credit where taxpayer pays someone else’s medical scheme contributions
21 October 2014
Posted by: Author: SAIT Technical
Author: SAIT Technical
Q: Can a taxpayer
claim contributions paid for his mother's medical aid from his own income? Also
what rules are used in terms of age? That of the taxpayer or the dependent?
The Taxpayer's mother is financially dependent on the
taxpayer. The medical aid is in her name and all accounts that had to be paid
from their own pocket were issued in the name of the mother. The taxpayer paid
all contributions as well as additional accounts on behalf of his mother.
A: The medical
scheme fees tax credit applies in respect of fees paid by the person to a
medical scheme registered under the Medical Schemes Act. It is then in respect of benefits to the
person and one dependant. For the
purposes of section 6A a "dependant” in relation to a person means a
"dependant” as defined in section 1 of the Medical Schemes Act.
In terms of the Medical Schemes Act "dependant” means -
(a) the spouse or partner, dependent children or other
members of the member's immediate family in respect of whom the member is
liable for family care and support; or
(b) any other person who, under the rules of a medical
scheme, is recognised as a dependant of a member.
And a "member” means a person who has been enrolled or
admitted as a member of a medical scheme, or who, in terms of the rules of a
medical scheme, is a member of such medical scheme.
In SARS Guide on the Determination of Medical Tax Credits
and Allowances (Issue 4) it is stated that: "Immediate family” is a particular
group of relatives used in rules of law. This group is limited to a person’s
spouse or life partner, parents (including adopted and step-parents), children
(including adopted and step-children) and siblings.
Section 6A makes no reference to the age of the taxpayer,
but section 6B does. The age of the
dependent is not relevant.
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