GAAR Introduction Delayed

GAAR Introduction Delayed

13 December 2012

The introduction of the General Anti Abuse Rule (GAAR) is to be delayed. It will now come into force from royal assent to the Finance Bill 2013 in July, instead of from 1 April 2013 as originally planned.

A number of new amendments will include:
  • Changes to the “double reasonableness test”, the wording of which has been clarified to ensure that the GAAR operates as intended.
  • The list of example indicators of abusive tax arrangements has also been amended and the revised legislation includes an example indicator of non-abusive arrangements.
  • Provisions dealing with counteraction and consequential adjustments have been expanded, and clarification that the consequential adjustments can only reduce a person’s liability to tax.
  • Procedural requirements relevant to the application of the GAAR by HMRC are set out, including details of the role of the GAAR Advisory Panel.

Many commentators find that the draft legislation fails to lift the cloud of uncertainty that surrounds the operation of the proposed GAAR, partly due to the many nuances and subtleties it includes. The Advisory Panel is a limited safeguard for taxpayers but ultimately it could be argued that too much discretion is left to HMRC and the courts, especially where the arrangements in question fall beyond the examples given in the guidance or are not sanctioned by previous clear and unequivocal HMRC practice. It may only intensify the debate over ‘morality’ in the tax system, which makes it harder for businesses to plan with any certainty.

spread the word

Daly Park Newry Office

6 Trevor Hill Newry Co. Down,
Northern Ireland BT34 1DN
Fax: 028 3025 7335

Get Directions


Contact Daly Park Belfast:

-->