Definition of general anti-abuse rule GAAR

A general anti abuse rule (GAAR) – a set of broad and general principles-based rules enacted in the tax code aimed at counteracting avoidance of tax – was introduced for certain transactions entered into on or after 17 July 2013. It supplements the current series of targeted anti avoidance rules (TAARs) which aim to prevent tax avoidance in specific areas of the legislation. The GAAR is targeted at flagrant abusive and artificial schemes.

There is a different Scottish general anti avoidance rule that applies to land and buildings transactions tax and Scottish landfill tax from April 2015.

A number of other jurisdictions (e.g. Australia, Canada) have a general anti-avoidance rule (also referred to as a GAAR) and generally the provisions have broader application than the targeted UK GAAR. [1]

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