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What is GAAR?

The GAAR (general anti-abuse rule) is a general approach to tackling tax avoidance. It seeks to counteract tax advantages arising from abusive tax arrangements. The counteraction is exercised by making adjustments on a just and reasonable basis. This guidance note refers to the GAAR as the ‘UK GAAR’ to distinguish the provisions from the Scottish general anti-avoidance rule (Scottish GAAR) which came into effect on 1 April 2015 in relation to the devolved taxes.

The UK GAAR applies to arrangements entered into on or after 17 July 2013. This includes arrangements that are part of wider arrangements entered into before that date, although the GAAR cannot be applied to such parts of the wider arrangements entered into before that date. Any such wider arrangements are, however, to be taken into account if they would help establish that GAAR should not be applied.

Scope and priority of UK GAAR

The UK GAAR takes priority over any other