HM REVENUE & CUSTOMS has appointed a permanent chair of its General Anti-Abuse Rule advisory panel, following interim chair and original author of the rule’s proposals Graham Aaronson QC’s spell in the role.
Former partner and head of tax at law firm Allen & Overy, Patrick Mears, will take on the role with effect from 15 April and will lead work to appoint a panel.
The original 11-strong panel will vacate their roles once Mears appoints his own members.
The rule, designed to prevent contrived tax avoidance schemes, will be included in the 2013 Finance Bill and will take effect once it has received Royal Assent in the summer.
New guidance on the rule’s operation was announced alongside Mears’ appointment, containing examples of the legislation’s purpose and examples of its scope.
In particular, it illustrates that the GAAR may not be applied to international tax arrangements, especially between OECD states with double-taxation treaties. Nor, for example, will the rule cover whether a taxpayer chooses to operate as a sole trader or as a limited company.
PwC tax partner Alex Henderson said: “Today’s guidance highlights the GAAR aims to end extreme avoidance, not the centre ground of tax planning. There are clear examples of what the GAAR won’t cover, such as reliefs to support business activity and investment. This will help reassure taxpayers and prevent business being gummed up by uncertainty. The guidance is also important for managing expectations – ordinary international tax arrangements are outside the GAAR’s scope.”
The guidance can be seen here.
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