The Government has in recent years clamped down significantly on tax avoidance schemes, in particular introducing the Disclosure of Tax Avoidance Schemes (“DOTAS”) which obliges promoters and users of tax avoidance schemes to provide early information to HMRC. It also introduced the General Anti-Abuse Rule (“GAAR”) which allows HMRC to counteract tax advantages arising from abusive tax arrangements that do not stay within the spirit of tax legislation. In short if there is a tax arrangement which has the aim of achieving a result that Parliament did not anticipate and which cannot reasonably be regarded as reasonable then it will fall foul of the GAAR and HMRC penalties are likely to follow. It remains to be seen how the Courts will interpret the GAAR.
This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.