Scottish general anti-avoidance rule (Scottish GAAR)

By Tolley in association with Andrew Ford of Barr & Ford Limited

The following Corporation Tax guidance note by Tolley in association with Andrew Ford of Barr & Ford Limited provides comprehensive and up to date tax information covering:

  • Scottish general anti-avoidance rule (Scottish GAAR)
  • Background
  • Operation of Scottish GAAR
  • Revenue Scotland guidance
  • Commentary
  • Circumstances where both the Scottish GAAR and UK GAAR could apply


The Scottish GAAR is contained within RSTPA 2014, ss 62–72 (subscription sensitive). The stated purpose of the rule is 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. It applies to devolved taxes, which are presently land and buildings transaction tax (LBTT) and Scottish landfill tax (SLFT). The number of devolved taxes will increase once the recommendations of the Smith Commission  are implemented, see the Devolved taxes in Scotland― the current position [updated] news item. The Scottish rate of income tax is not a devolved tax and remains under the control of HMRC, therefore is not within the Scottish GAAR.

SSI 2015/110; RSTPA 2014, s 3 (both subscription sensitive)

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 are set out below. Revenue Scotlandguidance is also given greater import by the legislation, and key points from the guidance are also set out below.

Operation of Scottish GAAR

The first point to note is that Scottish GAAR is a general anti-avoidance rule, and therefore has a potential wider application than the UK general anti-abuse rule (UK GAAR). The purpose of the Scottish GAAR is to counter tax advantages arising from tax avoidance arrangements that are artificial. The meaning of these terms is therefore key and are discussed below.

RSTPA 2014, s 62 (subscription sensitive); RSTP8003 
Artificial tax avoidance arrangements

For the Scottish GAAR to apply there must be an ‘arrangement’ which is:

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