General Anti Avoidance Rule Notes
This is a sample of our (approximately) 5 page long General Anti Avoidance Rule notes, which we sell as part of the Tax Law Notes collection, a 1st package written at Oxford in 2017 that contains (approximately) 467 pages of notes across 24 different documents.
The original file is a 'Word (Docx)' whilst this sample is a 'PDF' representation of said file. This means that the formatting here may have errors. The original document you'll receive on purchase should have more polished formatting.
General Anti Avoidance Rule Revision
The following is a plain text extract of the PDF sample above, taken from our Tax Law Notes. This text version has had its formatting removed so pay attention to its contents alone rather than its presentation. The version you download will have its original formatting intact and so will be much prettier to look at.
What is GAAR
o Public reaction to tax avoidance in times of austerity
GAAR is in Finance Bill 2013 o Policy issue
Based on the premise that all taxpayers should pay their fair contribution. This same premise underlies the
Parliament has decisively rejected this approach, and has imposed an overriding statutory limit on the
extent to which taxpayers can go in trying to reduce their tax bill.
Rejects the approach taken by the Courts in a number of old cases to the effect that taxpayers are
free to use their ingenuity to reduce their tax bills by any lawful means, however contrived those
means might be and however far the tax consequences might diverge from the real economic
position Duke of Westminster v IRC (1936)
That limit is reached when the arrangements put in place by the taxpayer to achieve that purpose
go beyond anything which could reasonably be regarded as a reasonable course of action
How does it work?
o A residual catch all when TAARs and other antiavoidance rules fail o Applies to
"Tax arrangements" that are "abusive"
Double reasonableness test "cannot reasonably be regarded as a reasonable course of action"
Indicators of abusiveness
EFFECT o a tax adjustment which is just and reasonable in all the circumstances. The appropriate tax adjustment is not
necessarily the one that raises the most tax.
When taxpayer may have carried out any one of several alternative nonabusive transactions to achieve the
best result - select the one that the taxpayer would most likely have carried out
International rules o International treaties on double taxation and the attribution of profits o But there is work underway in the OECD to counteract the erosion of the tax base and profit shiftin
Assessment of GAAR
o Freedman (2012) Legitimise the discretion, after half a century of soul searching from the courts between Duke of
Westminster and BMBF
Ramsay Principle was diluted by MacNiven v Westmoreland (2001) which reduced it to a principle of
judicial construction and in BMBF v Mawson (2005) the idea that the courts might take an antiavoidance
approach to legislative construction was rejected.
We are back to the dictum of Rowlatt J in Cape Brandy Syndicate (!921) "no room for intendment. There
is no equity about a tax. Nothing is to be read in, nothing is to be implied"
A legislative GAAR would form the basis of the development of a judicial GAAR As a result we have a string of cases where the revenue lost where a GAAR would have helped
****************************End Of Sample*****************************
Buy the full version of these notes or essay plans and more in our Tax Law Notes.