The general anti-abuse rule

When does the GAAR apply?

The UK's general anti-abuse rule (the GAAR):

1. •

   counteracts (by the making of adjustments on a just and reasonable basis by HMRC or the taxpayer)

2. •

   tax advantages that would, ignoring the GAAR, arise from abusive tax arrangements, and

3. •

   has applied since 17 July 2013 (the date of Royal Assent to the Finance Act 2013 (FA 2013)) except that, in respect of National Insurance contributions (NICs), it has only applied since 13 March 2014

The GAAR only has effect in relation to arrangements that are entered into on or after the commencement date (17 July 2013 or, for NICs, 13 March 2014). If the arrangements form part of a wider set of arrangements that include pre-commencement arrangements, the GAAR ignores the pre-commencement arrangements unless they can demonstrate that the post-commencement arrangements are not abusive.

See Practice Note: The general anti-abuse rule (GAAR) and Flowchart: Does the GAAR apply?

The GAAR forms part of the UK's anti-avoidance framework

The GAAR:

•takes priority over other parts of tax legislation, and•forms part of the UK's anti-avoidance framework that includes: ...