In Warnock v. The Queen2014 TCC 240, the Tax Court of Canada considered medical expense tax credits claimed by the taxpayer for various expenses incurred with respect to a surrogacy arrangement.

The taxpayer claimed medical expense tax credits for (i) medical services provided directly to the taxpayer, (ii) medical services provided directly to the surrogate, and (iii) legal expenses related to a required surrogacy contract. Amounts claimed with respect to the latter two categories were disallowed by the Minister of National Revenue.

In dismissing the taxpayer’s appeal, the Tax Court of Canada considered section 118.2 of the Income Tax Act and found that the medical services provided to the surrogate and the legal expenses incurred did not meet the requirements of subsection 118.2(2) as the surrogate was not a “patient”, as defined therein, and the legal expenses were not incurred with respect to an organ transplant.

http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/72942/index.do