Commentary

A7.335 Serial tax avoidance—penalties

Administration and compliance

A7.335 Serial tax avoidance—penalties

A7.335 Serial tax avoidance—penalties

A person who during a period of warning uses arrangements that are ultimately defeated will incur a penalty. The penalty is 20% of the amount of tax understated or overclaimed for the first defeat of a scheme used during a warning period, 40% for the second such defeat and 60% for any subsequent defeats1. If a person incurs more than one simultaneous relevant defeat in relation to different arrangements, the defeats are to be treated in order of the 'value of the counteracted advantage', with the lowest value being treated as incurred last. If a person is given a single warning notice in relation to more than one defeat, they are to be treated as having received a separate notice in relation to each2.

The 'value of the counteracted advantage' is the additional amount of tax due or payable as a result of the counteraction under the GAAR, or the follower notice or DOTAS provisions, and that counteraction is final. The

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial