Regardless of how the amendments may ultimately be read, the motivation behind them is to make 'purpose' the fulcrum of the tax avoidance test, not the 'counterfactual', nor the 'tax benefit'. The idea is to get Part IVA operating (again) as an integrated whole, with purpose as the first question in the enquiry. This should be welcomed rather than feared.
So, how does a taxpayer implement any commercial arrangement, knowing that the focus is now on eight factors that might at some time be objectively applied to determine whether there has been tax avoidance? It would be brave to draw comfort from the comment in the Explanatory Memorandum to the amendments that because subjective motives are not the concern of Part IVA, 'it does not therefore strike at every arrangement that is entered into with an eye to tax minimisation.'
However, whilst Part IVA is an important consideration, it should not operate to cause taxpayers to unduly second-guess the undertaking of ordinary commercial transactions.
In fact the shift back to purpose may clear the air around a lot of commercial arrangements. Given the first two factors, manner and form and substance, are generally decisive regarding purpose, if you can demonstrate that the manner and the form and substance of the arrangement are objectively not motivated by tax avoidance or designed in such a way as to obtain a tax benefit, and back this up with evidence, then a view on the non-application Part IVA may well be reached sooner. It should not be forgotten that in a number of contentious Part IVA cases, taxpayers have been successful in demonstrating that the dominant purpose of the scheme was not tax avoidance.