12 January 2000 External T.I. 9932085 - BLOOD CORD KIT

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues: Whether charges to register and store the umbilico cord of a new-born baby for future use ("Blood Cord Kit") are considered qualifying medical expenses under paragraphs 118.2(2)(a) or 118.2(2)(o) of the Act.

Position: Question of fact but probably no.

Reasons: Paragraph 118.2(2)(a) does not apply as the payments must be for medical services involving an existing medical condition or illness.

Paragraph 118.2(2)(o) does not apply as the procedures or services must assist a medical practitioner in making a diagnosis and formulating a course of treatment.

XXXXXXXXXX 993208

Wm. P. Guglich

Attention: XXXXXXXXXX

January 12, 2000

Dear Sirs:

Re: Medical Expenses

This is in reply to your letter of November 25, 1999, requesting our views whether charges for a "Blood Cord Kit" are considered qualifying medical expenses under paragraph 118.2(2)(a) or 118.2(2)(o) of the Income tax Act (the "Act"). This is a charge to register and store the umbilico cord of a new-born baby for possible future use.

Paragraph 118.2(2)(a) of the Act provides that medical expenses include amounts paid to a medical practitioner, dentist or nurse or a public or licensed private hospital in respect of "medical or dental services". Although it is a question of fact whether a payment is made in respect of medical services, it is our view that to be regarded as such, the payment must involve an existing medical condition or illness. In our opinion, the expenses described in your letter do not involve an immediate medical condition or illness, rather they are preventive in nature. Accordingly, in general terms, amounts paid for such services do not qualify as medical expenses under this paragraph.

Paragraph 118.2(2)(o) of the Act deals with amounts paid for laboratory, radiological or other diagnostic procedures or services prescribed for a patient by a medical practitioner or dentist. Under this provision, the procedures or services must, together with the necessary interpretations, maintain health, prevent disease or assist in the diagnosis or treatment of any injury, illness or disability. Further, the reference in paragraph 118.2(2)(o) of the Act to "other diagnostic procedures or services" is generally limited to diagnostic services or procedures of the same class as laboratory or radiological services. In other words, the procedures or services must assist a medical practitioner in making a diagnosis and formulating a course of treatment. As the expenses described in your letter are not for such purposes, they would also not qualify under this paragraph.

Since the expenses described in your letter do not appear to qualify under either paragraph 118.2(2)(a) or (o),of the Act, and since no other paragraph or provision seems to apply, it is our view that such expenses would not qualify as medical expenses for purposes of the medical expense tax credit.

We trust our comments will be of assistance.

Yours truly,

John Oulton
for Director
Business and Publications Division
Income Tax Rulings Directorate
Policy and Legislation Branch

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