United Kingdom

Key Measure: Tax - General anti-abuse rule 

KPMG Budget 2013
Description of Measure


The Government has reaffirmed its intention to introduce a general anti-abuse rule (GAAR) in Finance Bill 2013 following extensive consultation which began with the issue of a formal consultation document in June 2012.


The GAAR is intended to counteract tax advantages which arise from certain ‘abusive’ tax arrangements and will apply to the following taxes: income tax, corporation tax, capital gains tax, petroleum revenue tax, inheritance tax, stamp duty land tax and the new annual residential property tax. In addition, separate legislation will be introduced in relation to National Insurance contributions after enactment of Finance Act 2013 when parliamentary time permits. 


Where the GAAR applies the relevant tax advantages will be counteracted by the making of adjustments on a just and reasonable basis.


The GAAR will apply to relevant tax arrangements entered into on or after the date of Royal Assent to Finance Bill 2013.


There were, however, no further details provided in the Budget following on from the publication of draft legislation and guidance in December 2012. Given the wide interest in this proposal and the number of representations that were submitted on the drafts it would be surprising if changes were not made. However it will be necessary to await the publication of Finance Bill 2013, which is scheduled to be issued on 28 March 2013, for further details. 


The exchequer benefit of this measure is assessed at approximately £50m per annum which implies it is mainly being introduced for its deterrent effect.

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