My customer has a brother in an NGO Rehab centre and pays R 3000 per month to the NGO. It is not a donation and she will not get a Sec 18A Certificate but I wondered if this could be claimed as medical expenses, and what supporting docs would be needed eg
Important:
This answer is based on tax law year ending 28 February 2017.
Answer:
For purposes of the guidance that follows we accepted that the issue is whether the client qualifies for the additional medical expenses tax credit (section 6B of the Income Tax Act) – as the ability to make a deduction is no longer possible. This may well be a donation, but to the mother and not to the entity, that will be exempt from donations tax - see section 56(2)(d) of the Income Tax Act.
The first issue that is relevant then is the definition of ‘dependant’ in section 6B(1). We copy the relevant part for your convenience:
A “dependant” means … (c) any other member of a person’s family in respect of whom he or she is liable for family care and support. In the Explanatory Memorandum when this section was introduced into the Act the following example was given:
“Facts: A single taxpayer under 65 years of age, and not disabled, incurs medical expenses on behalf of his or her mother. This taxpayer is liable for family care and support in respect of his or her mother.
Result: The taxpayer will be able to add the expenditure incurred in respect of his or her mother to his own medical expenditure.” Section 6B therefore doesn’t use the term ‘immediate family’ that was used in the repealed section 18.
The next issue is that the expenses must be ‘qualifying medical expenses’. This is defined in section 6B(1). The section 6B(1)(a)(i) requirement is that it must be “amounts … paid by the person … to any duly registered medical practitioner, dentist, optometrist, homeopath, naturopath, osteopath, herbalist, physiotherapist, chiropractor or orthopedist for professional services rendered or medicines supplied to the taxpayer…” The subsection doesn’t, as with nursing or a nurse (in item (ii)), refer to illness or confinement. The item (i) expenses are also not further qualified as is for instance expenses in consequence of any physical impairment or disability suffered by the taxpayer – there the expenses must be prescribed by SARS.
The only requirements then seem to be that it is paid to a duly registered person (mentioned in the section) and that it must be for professional services rendered. We submit that duly registered refers to registered with the Health Professions Council of South Africa – see SARS’s guide on the determination of medical tax credits and allowances.
No guidance is given on the meaning of professional services rendered and the phrase must take its ordinary meaning. The Health Professions Act, 1974, refers to a person practicing “any health profession the practice of which mainly consists of -
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the physical or mental examination of persons;
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the diagnosis, treatment or prevention of physical or mental defects, illnesses or deficiencies in man humankind;
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the giving of advice in regard to such defects, illnesses or deficiencies; or
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the prescribing or providing of medicine in connection with such defects, illnesses or deficiencies…”