Peter Vaines navigates the stormy waters of tax
The Finance Act 2013 came into force on 17 July and with it a number of new provisions. One of the most important is the general anti abuse rule (GAAR) which applies to tax arrangements taking place after that date.
GAAR
Where arrangements are entered into with a main purpose of obtaining a tax advantage, they will be regarded as abusive (and therefore subject to counteraction) if they “cannot reasonably be regarded as a reasonable course of action in relation to the relevant tax provisions”.
I may not be the first person to observe that the term “abusive” is therefore being defined as unreasonable, which many may feel is not the same thing at all.
You therefore need to consider whether what you are doing is intended to exploit any shortcomings in the legislation and whether it involves any contrived or abnormal steps. You also have to consider what policy objectives should be implied by the legislation. I don’t know how the ordinary taxpayer
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