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General anti-tax avoidance rule out for consultation

12 June 2012

A proposed general anti-abuse rule (GAAR) to tackle artificial and abusive tax avoidance schemes is the subject of a UK Government consultation opened today.

As announced in this year's Budget, it is planned to introduce such a rule in 2013. The consultation includes draft legislation.

The proposal follows an independent review led by Graham Aaronson QC, who concluded that the introduction of a targeted rule would deter artificial tax avoidance schemes and contribute to providing a more level playing field for business.

In line with Mr Aaronson’s recommendations, the proposed GAAR will apply to the main direct taxes – income tax, corporation tax, capital gains tax and petroleum revenue tax – and national insurance, but will be extended to cover stamp duty land tax. The consultation also proposes an extension of the GAAR to inheritance tax and makes clear that the Government will consider including further taxes if appropriate.

The Government will establish an advisory panel, members of which will come from both HMRC and business, to give opinions on cases where HMRC proposes to apply the GAAR, and to develop, update and approve guidance on its use.

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.”

Click here to access the consultation. The deadline for responses is 14 Seotember 2012.

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