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The final nail
Key points
- The GAAR is an anti-abuse rule targeting abusive arrangements rather than an anti-avoidance rule.
- Was there a reasonably held view that the tax arrangements were a reasonable course of action?
- Before their abolition the employer shareholder shares legislation provided a complete capital gains tax exemption for disposals.
- The arrangements ensured that within months virtually all economic rights passed from one type of share to another.
- The transaction unlocked the whole value of the company tax free.
- There was a contrived or abnormal step designed to exploit a legislative shortcoming.
When the general anti-abuse rule (GAAR) was introduced by FA 2013 Pt 5 – it applies to arrangements entered into on or after 13 July 2013 – there was a long period before anything seemed to happen. This was partly because there would inevitably be a gap between the carrying out of transactions...
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