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Study group reaches ‘consensus’ on potential advantages of a GAAR

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The study group considering the merits of a introducing a general anti-avoidance rule has reached consensus on the potential advantages of a GAAR for the UK, and what concerns such a rule would need to ‘address and allay’.

Graham Aaronson QC, the tax barrister leading the study group which is scheduled to report to the Treasury by the end of October, has told David Gauke that the group has also reached consensus on the strength and weaknesses of the current judicial approach ‘to the interpretation of tax statutes and to the application of those statutes to tax avoidance schemes’.

The group has developed a conceptual framework of principles that would need to be embodied in a GAAR for it to be suitable to enact in the UK, Aaronson said in a letter to the Exchequer Secretary to the Treasury.

He emphasised, however, that ‘we do not yet know whether it will be feasible to develop the conceptual framework into a set of statutory rules fit for enactment’.

Aaronson’s letter and Gauke’s reply are available on the Treasury website.