The ATO has issued a Decision Impact Statement in relation to the AAT decision in Tricare Group Pty Ltd and FCT  AATA 298; 2011 ATC 1-031. The case concerned the deductibility of payments to persons who had ceased to be a resident (or to their legal personal representative) of a retirement village.
The AAT held that the amounts in question were incurred in carrying on a business for the purpose of gaining or producing assessable income and were not capital or of a capital nature. That being the case, the operation of s 40-880 of the ITAA 1997 did not arise for consideration.
The ATO considers that the AAT's decision was a decision of fact based on the circumstances of this taxpayer; accordingly, this decision has no implications where these payments are made by village operators in the differing circumstances covered by TR 2002/14. That is, an existing village operator makes these payments to a former resident (or to their legal personal representative) under a contractual obligation between the village operator and the resident. Consequently, in these circumstances, the ATO maintains the view, as outlined in paragraph 50 of TR 2002/14, that these payments are capital or of a capital nature
Based on the above view of the decision, the ATO does not intend to conduct a review of TR 2002/14.
The ATO also does not intend to conduct a review of GSTR 2011/1.