The treaty override in the illustrative GAAR would undermine the UK’s respect for international law. A more thoughtful approach to the terms of treaties is required to counter perceived avoidance.
Lord Bingham famously observed that the rule of law includes compliance by the state with its obligations in international law whether deriving from treaties or international customary law. Compliance with treaty obligations is itself a tenant of international law codified in Article 26 of the Vienna Convention on the Law of Treaties.
The 2011 Budget announced general anti-avoidance legislation relating to tax treaties for inclusion in Finance Bill 2012. The intended legislation set out in a technical note on 11 August 2011 planned to override all...
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