Owner-Managed Businesses

Welsh general anti-avoidance rule (Welsh GAAR)

Produced by Tolley
  • 22 Dec 2021 21:31

The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Welsh general anti-avoidance rule (Welsh GAAR)
  • Introduction to Welsh GAAR
  • Definitions and scope of Welsh GAAR
  • Counteraction of tax advantages
  • Mechanism of counteraction
  • The right of appeal
  • Welsh GAAR penalties
  • Other guidance notes on GAAR

Welsh general anti-avoidance rule (Welsh GAAR)

Introduction to Welsh GAAR

The UK general anti-abuse rule described in the General anti-abuse rule (UK GAAR) guidance note, does not apply to the Welsh devolved taxes. Instead, a separate general anti-avoidance rule (GAAR) applies to devolved taxes in Wales from 1 April 2018 (ie land transaction tax and landfill tax).

Welsh income tax is only partially devolved because the National Assembly for Wales can only set Welsh rates of income tax, although it has not done so and Welsh taxpayers continue to pay income tax at the same rates that apply to the rest of the UK (excluding Scotland). HMRC administers and collects Welsh income tax and the UK general anti-abuse rule continues to apply to income tax.

The Welsh GAAR is generally considered to be wider in scope than the general UK GAAR because it is an anti-avoidance rather than an anti-abuse rule. It does not look at ‘abusive tax arrangements’ in the same way as the GAAR that applies in the rest of the UK. Rather, it applies when the obtaining of a tax advantage is 'the main purpose, or one of the main purposes, of an arrangement’. The Welsh Revenue Authority guidance on the Welsh GAAR warns that taxpayers should expect that the Welsh Revenue Authority will seek to proactively apply a wide interpretation of the GAAR.

The Welsh GAAR does not apply when the arrangement was consistent with generally prevailing practice and the Welsh Revenue Authority had indicated its acceptance

Access this article and thousands of others like it
free for 7 days with a trial of TolleyGuidance.

Think Tax.
Think Tolley.

Critical, comprehensive and up-to-date tax information


Popular Articles

Utilising the capital gains tax annual exemption

Taxpayers may wish to consider basic tax planning arrangements in use the capital gains tax annual exemption. This type of tax planning is often reviewed at the end of the tax year.This guidance note first looks at the annual exemption in detail and then various tax planning strategies that might be

27 Οκτ 2021 19:10 | Produced by Tolley Read more Read more

Deferral of capital gains via reinvestment

Why defer a gain?An individual’s net taxable income and chargeable gains for the tax year influence the rate of tax payable on their capital gains. See the Introduction to capital gains tax guidance note.Depending on the nature of the asset disposed of, this can result in the individual paying

27 Οκτ 2021 19:10 | Produced by Tolley Read more Read more

Coronavirus (COVID-19), statutory sick pay (SSP) and NIC

Following Spring Budget 2020, statutory sick pay (SSP) rules were changed temporarily to help workers affected by the coronavirus (COVID-19) outbreak. The Chancellor confirmed the Prime Minister’s previous announcement that SSP will be paid from day 1 rather than day 4. Updated guidance on the

21 Δεκ 2021 17:30 | Produced by Tolley Read more Read more