The General Anti-Abuse Rule (GAAR)

The General Anti-Abuse Rule (GAAR) which came into force on 17 July 2013, is another part of the government’s approach to managing the risk of tax avoidance.

It has been introduced to strengthen HMRC’s anti-avoidance strategy and help HMRC tackle abusive avoidance. The GAAR legislation defines what are, for its purposes, tax arrangements that are abusive.

Even if something isn’t covered by the GAAR, that doesn’t mean it won’t be tackled in another way. HMRC will continue to tackle tax avoidance using existing anti-avoidance methods as well as the GAAR, where appropriate.

The GAAR applies to the following taxes:

  • Income Tax
  • Corporation Tax (including amounts chargeable or treated as Corporation Tax)
  • Capital Gains Tax
  • Petroleum Revenue Tax
  • Stamp Duty Land Tax
  • Annual Residential Property Tax

If you need to disclose undeclared tax to HMRC please contact us for expert advice.