The consultation on the introduction of a general anti-abuse rule ("GAAR") closed last week. It is the intention of the Government to include a GAAR in Finance Bill 2013.The stated aim of the
The consultation on the introduction of a general anti-abuse rule ("GAAR") closed last week. It is the intention of the Government to include a GAAR in Finance Bill 2013.
The stated aim of the Government is to introduce "a deterrent to those engaging in artificial and abusive avoidance schemes" in a way that does not "risk compromising the certainty that is vital to provide the confidence to do business in the UK".
Whether the draft GAAR legislation achieves that aim is debatable. Our particular concerns are twofold. First, the GAAR seems to have moved from being focused on counteracting only the most egregious examples of abusive structures towards being a "broad spectrum antibiotic" (which the Government, in agreement with Graham Aaronson QC, said should not be introduced). Secondly, the tests as to whether or not the GAAR applies do not seem to be sufficiently precise to enable businesses to know (without incurring undue and onerous costs) whether transactions fall within or without the GAAR's ambit.
A copy of our response can be accessed here.
The stated aim of the Government is to introduce "a deterrent to those engaging in artificial and abusive avoidance schemes" in a way that does not "risk compromising the certainty that is vital to provide the confidence to do business in the UK".
Whether the draft GAAR legislation achieves that aim is debatable. Our particular concerns are twofold. First, the GAAR seems to have moved from being focused on counteracting only the most egregious examples of abusive structures towards being a "broad spectrum antibiotic" (which the Government, in agreement with Graham Aaronson QC, said should not be introduced). Secondly, the tests as to whether or not the GAAR applies do not seem to be sufficiently precise to enable businesses to know (without incurring undue and onerous costs) whether transactions fall within or without the GAAR's ambit.
A copy of our response can be accessed here.