The publication of the consultation document (which can be found here) and draft legislation, follows an announcement in the year’s Budget that a GAAR would be introduced in 2013.
After years of deliberation, the Government’s decision to introduce a General Anti-Avoidance Rule follows the conclusion of an independent report, conducted by Graham Aaronson QC last year, which found that a GAAR would “deter artificial tax avoidance schemes and contribute to providing a more level playing field for business”.
As well as considering Aaronson’s report in detail, the Treasury said it has held informal discussions with business, tax practitioners and representative bodies in order to hear their views prior to drawing up the consultation and draft legislation.
The Treasury said, in line with recommendations made in Aaronson’s report, the proposed GAAR will apply to the “main direct taxes”, National Insurance and “will be extended to cover” Stamp Duty Land Tax. It added that the consultation proposes an extension of the GAAR to Inheritance Tax and “makes clear the government will consider including further taxes if appropriate”.
David Gauke, exchequer secretary to the Treasury, said: “The introduction of a GAAR will strengthen our anti-avoidance strategy, complementing the tools HMRC already has at its disposal and acting as a deterrent to those engaging in artificial and abusive avoidance schemes. The rule we are consulting on from today will effectively tackle such schemes, while minimising the impact on the vast majority of taxpayers who pay a fair share.”
The consultation is due to run for 14 weeks, beginning today (12 June) and concluding on the 14 September 2012.
