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Edge of power
Key points
- The panel said the steps taken by the companies were a reasonable course of action for tax purposes.
- The burden of proof is on HMRC to show that the arrangements are abusive.
- The shortcoming in the legislation was so fundamental that it was not something that could be fixed by applying the GAAR.
- The taxpayer’s advisers were concerned about the lack of quantification in HMRC’s notice but the panel suggested that this should be left for the taxpayer to raise with HMRC.
- It seems that HMRC has found the edge of the power of the GAAR.
In what is familiar territory for the general anti-abuse rule (GAAR) advisory panel its most recent opinion delivered in April but published in July covered a set of arrangements that sought to circumvent the tax provisions that bring amounts loaned by close companies to their participators into tax where...
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