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Watch out!

19 February 2013 / Michael L Firth
Issue: 4391 / Categories: Comment & Analysis , GAAR , Admin

Personal trading companies could slip up on the new general anti-abuse rule


  • Commonwealth experience of anti-avoidance rules may be relevant to the UK.
  • A look at the New Zealand case of Penny and Hooper v CIR.
  • A structure was caught even though set up before a change of tax rates.
  • “Abuse” appears to be simply a question of reasonableness.
  • Will the operation of a GAAR effectively depend on what HMRC decide to allow?

The general anti-abuse rule (GAAR) is nearly upon us. It is therefore worth considering what sort of existing arrangements might in future fall foul of the latest weapon in HMRC’s already abundant armoury with which they combat tax avoidance.

Some guidance in this respect might be usefully sought from other common law jurisdictions that already have a GAAR and have already built up some case law.

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