The draft general anti-abuse rule set out in HMRC’s recent consultation document incorporates all the main principles that Graham Aaronson’s study group considered appropriate for a fair and effective GAAR, Aaronson has said in a letter to David Gauke, Exchequer Secretary.
‘Indeed, put shortly, the study group considers that it is an excellent draft,’ Aaronson added in a letter published on HM Treasury’s website.
In a supplementary report he noted that the ‘consultation GAAR’ was ‘very well drafted’ and was ‘both succinct and lucid’.
There were some substantive differences between the consultation GAAR and the draft annexed to the study group’s report last November (the ‘GAAR study draft’) but they did not detract from ‘the fairness, balance or effectiveness of the consultation GAAR’.
Aaronson reported that the study group was:
‘quite happy’ to see the scope of the GAAR extended to inheritance tax, stamp duty land tax and a proposed new tax on ownership of high value homes;
content that an exclusion for ‘arrangements without tax intent’ was omitted, given that ‘such a safeguard would have very limited, if any, application in practice’;
content for a ‘just and reasonable’ basis to be the sole basis of counteraction; and
content that the consultation GAAR did not provide for any clearances.
The group noted that initial drafts of guidance on the operation of the GAAR would be provided by HMRC. It was ‘essential’, however, that the guidance should be as impartial and objective as possible.
‘This makes it imperative that the advisory panel, who will be required to approve the guidance, is strongly constituted and carries out its responsibilities with complete independence,’ the supplementary report said.
Ashley Greenbank, Partner at Macfarlanes, said it would have been ‘preferable for the GAAR study group to keep its counsel until later in the process’.
Greenbank said in a note published on the firm’s website: ‘Publication of the supplementary report at this stage risks providing a shield to the government and HMRC with which to deflect any such concerns which are raised in the consultation process.’
Aaronson said that while the study group did not consider it necessary to recommended any changes, members of the group ‘may suggest particular refinements’ during the process. The consultation period closes on 14 September.
The draft general anti-abuse rule set out in HMRC’s recent consultation document incorporates all the main principles that Graham Aaronson’s study group considered appropriate for a fair and effective GAAR, Aaronson has said in a letter to David Gauke, Exchequer Secretary.
‘Indeed, put shortly, the study group considers that it is an excellent draft,’ Aaronson added in a letter published on HM Treasury’s website.
In a supplementary report he noted that the ‘consultation GAAR’ was ‘very well drafted’ and was ‘both succinct and lucid’.
There were some substantive differences between the consultation GAAR and the draft annexed to the study group’s report last November (the ‘GAAR study draft’) but they did not detract from ‘the fairness, balance or effectiveness of the consultation GAAR’.
Aaronson reported that the study group was:
‘quite happy’ to see the scope of the GAAR extended to inheritance tax, stamp duty land tax and a proposed new tax on ownership of high value homes;
content that an exclusion for ‘arrangements without tax intent’ was omitted, given that ‘such a safeguard would have very limited, if any, application in practice’;
content for a ‘just and reasonable’ basis to be the sole basis of counteraction; and
content that the consultation GAAR did not provide for any clearances.
The group noted that initial drafts of guidance on the operation of the GAAR would be provided by HMRC. It was ‘essential’, however, that the guidance should be as impartial and objective as possible.
‘This makes it imperative that the advisory panel, who will be required to approve the guidance, is strongly constituted and carries out its responsibilities with complete independence,’ the supplementary report said.
Ashley Greenbank, Partner at Macfarlanes, said it would have been ‘preferable for the GAAR study group to keep its counsel until later in the process’.
Greenbank said in a note published on the firm’s website: ‘Publication of the supplementary report at this stage risks providing a shield to the government and HMRC with which to deflect any such concerns which are raised in the consultation process.’
Aaronson said that while the study group did not consider it necessary to recommended any changes, members of the group ‘may suggest particular refinements’ during the process. The consultation period closes on 14 September.
