Scottish general anti-avoidance rule (Scottish GAAR)
Produced in partnership with Andrew Ford of Barr & Ford Limited
Scottish general anti-avoidance rule (Scottish GAAR)

The following Tax guidance note Produced in partnership with Andrew Ford of Barr & Ford Limited provides comprehensive and up to date legal information covering:

  • Scottish general anti-avoidance rule (Scottish GAAR)
  • Operation of Scottish GAAR
  • Artificial tax avoidance arrangements
  • Condition A
  • Condition B
  • Procedure under the Scottish GAAR
  • Counteraction under Scottish GAAR
  • Appeals
  • Revenue Scotland guidance
  • Commentary
  • more

The Scottish general anti-avoidance rule (Scottish GAAR) aims to protect revenue through counteracting tax avoidance arrangements, and is intended to work in tandem with the targeted anti-avoidance rules contained within the legislation implementing the devolved taxes.

The Scottish GAAR is effective from 1 April 2015 and applies to devolved taxes. A devolved tax is a tax specified as such by Part 4A of the Scotland Act 1998. The devolved taxes are land and buildings transaction tax (LBTT) and Scottish landfill tax (SLFT). Air departure tax and the aggregates levy are expected to be devolved at some point in the future. The number of devolved taxes will increase once the recommendations of the Smith Commission are implemented. Because the Scottish rate of income tax is not a devolved tax, it remains under the control of HMRC and is not within the Scottish GAAR.

The legislation governing the operation of the Scottish GAAR is at first glance self-explanatory and straightforward, but the apparent lack of complexity means that the rules have broad application. Commentary on the practical implications of the rules is set out below. Revenue Scotland guidance is also given greater importance by the legislation, and key points from the guidance are also outlined below.

Operation of Scottish GAAR

The purpose of the Scottish GAAR is to counter tax advantages arising in respect