A General Anti-Abuse Rule - CIOT and ATT comments
The CIOT and ATT comments, sent to HMRC on 13 September 2012, on this consultation which outlines the details of the proposal to introduce a GAAR, including draft legislation.
Our previous submission can be found here: http://www.tax.org.uk/tax-policy/public-submissions/2012/GAAR_CIOT_ATT
Our submission and the consultation document are available in Adobe (pdf) format.
Summary of Consultation Questions
- Do you agree that the GAAR should be limited to the taxes and duties set out in clause 1(3) of the Draft GAAR initially? Are there any particular issues relating to how the GAAR would function in relation to the taxes (including NICs) that are proposed to be included?
- Do you agree that the GAAR should be capable of counteracting UK tax advantages obtained under double tax agreements?
- Do you agree that (1) the proposed 'main purpose' rule serves as a useful filter, when coupled with the concept that arrangements must also be 'abusive' and (2) a specific exclusion for arrangements without tax intent is not required? If you think a specific exclusion is required, please explain why.
- 4. Do you agree that the proposed 'double reasonableness' test operates as intended to counteract only artificial and abusive schemes (such as those described in Annex B)?
- Do you agree that the counteraction provision in the draft GAAR is appropriate?
- The Government is continuing to develop its analysis regarding the appeals processes in relation to counteraction and consequential adjustments under the GAAR, and welcomes views which may inform detailed proposals to be published later in the year.
- The Government would welcome views on the options set out regarding commencement, how transitional arrangements should be dealt with, and whether there should be different rules for different taxes where appropriate.
- The Government welcomes views on clause 5(1) of the Draft GAAR.
- Do you agree that it is appropriate for particular weight to be given in the legislation to the GAAR guidance and the opinion(s) of the Advisory Panel on the arrangements?
- The Government welcomes comments on whether particular issues arise in relation to Self Assessment (where the relevant taxes operate within a Self Assessment regime) or within the existing administrative rules for those taxes that do not operate within a Self Assessment regime.
- The Government invites comments on the general proposal that the GAAR should as far as possible operate within existing administration rules for the taxes involved; and on what adaptations may be necessary to existing administrative rules to ensure that the GAAR operates with as little as possible additional administration cost and burden for taxpayers, advisers and HMRC. Is there a case for having a new type of assessment given the cross-regime range of the GAAR?
- The Government invites comments on whether time limits should be set for each of stages two, three and four and if so what those time limits should be.
- The Government welcomes comments on the proposals relating to the Advisory Panel.
- The Government would welcome views on the proposals for producing and updating the guidance.
- HMRC would welcome comments or evidence that can improve the TIA assessment of impacts, costs and yield of the GAAR proposals.
13 September 2012