General anti-avoidance rule ('GAAR')
The measure
The Government has announced that as part of its plan to tackle tax avoidance, it is to examine whether the use of a 'General Anti-Avoidance Rule' would be appropriate.
Who will be affected?
If implemented, this would impact all taxpayers (individual or corporate) who engage in transactions which helped mitigate their tax liabilities but have not been specifically approved by HMRC.
When?
Currently there are no fixed plans to implement such a regime and the Government has only announced a review.
Where implemented in other countries eg Canada, such rules have resulted in enormous uncertainty as to whether or not transactions are caught by such rules. We suspect that upon review the new Government will likely conclude, in line with prior Governments, that such a rule would not be advisable.
