Income tax code for section 18 medical deduction where contributions are made for an old couple
10 November 2014
Posted by: Author: SAIT Technical
Author: SAIT Technical
Q: I have a
client who pays the medical aid contribution for an old couple. Please advise
the code that will be applicable to claim a deduction.
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 in respect of benefits
to the person and one or more dependants.
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.
From the facts provided by you we don’t know if the "old
couple” are dependants as indicated above.
The section 18 deduction is then so much of the contributions made by
the taxpayer during the relevant year of assessment, as exceeds four times the
amount of the medical scheme fees tax credit in respect of that taxpayer in
terms of section 6A, unless the client is older than 65. The contributions are captured on the return
of income (ITR12) on a monthly basis.
Disclaimer: Nothing in this query and answer should be construed as
constituting tax advice or a tax opinion. An expert should be consulted for
advice based on the facts and circumstances of each transaction/case. Even
though great care has been taken to ensure the accuracy of the answer, SAIT do
not accept any responsibility for consequences of decisions taken based on this
query and answer. It remains your own responsibility to consult the relevant
primary resources when taking a decision.