The UK government has announced consultation on new laws aimed at limiting tax avoidance for the wealthy and business.
The general anti-abuse rule (GAAR) aims to tackle artificial and aggressive tax avoidance schemes that have no commercial or financial objective other than minimising tax.
The proposal was recommended by Graham Aaronson in a report on tax avoidance, which was generally supported by tax advisers and business.
Aaronson was asked to lead a study to consider whether a GAAR could deter and counter tax avoidance, while retaining a tax regime that is attractive to businesses.
In his report, Aaronson concluded that a general anti-abuse rule would deter artificial tax avoidance schemes and would contribute to providing a more level playing field for businesses.
GAAR will apply to income tax, corporation tax, capital gains tax and petroleum revenue tax – and national insurance, stamp duty and inheritance tax.
The government has also left the door open on including more taxes if tax avoidance schemes are uncovered.
David Gauke, Exchequer Secretary to the Treasury, said: “The introduction of a GAAR will strengthen our anti-avoidance strategy, complementing the tools HMRC already has at its disposal and acting as a deterrent to those engaging in artificial and abusive avoidance schemes.
“The rule we are consulting on from today will effectively tackle such schemes, while minimising the impact on the vast majority of taxpayers who pay a fair share.”
International tax and accountancy firm RSM Tenon has already stopped offering specialist tax advice in anticipation of the GAAR rules.
Consultation closes on September 14, 2012 with a view to making GAAR law in time for the start of the 2013 tax year.
