Finance Bill — New Clause 7 — Review of Anti-Tax Avoidance General Anti-Abuse Rule — 17 Apr 2013 at 21:57

The majority of MPs voted not to require a post-implementation review of the general anti-abuse rule aimed at tackling tax avoidance.

This vote occurred while MPs were considering the Finance Act^[1][2]. The text of the rejected amendment which was the subject of the vote stated:

• (4) The Chancellor shall provide a report to Parliament within two years of the passing of this Act, as part of a wider post-implementation review, into the scope of GAAR, the application of the double reasonableness test and its deterrent effect.

HMRC guidance on the "double reasonableness test"^[3] states:

• This requires HMRC to show that the arrangements “cannot reasonably be regarded as a reasonable course of action”. This recognises that there are some arrangements which some people would regard as a reasonable course of action while others would not.
• The ‘double reasonableness’ test sets a high threshold by asking whether it would be reasonable to hold the view that the arrangement was a reasonable course of action. The arrangement falls to be treated as abusive only if it would not be reasonable to hold such a view.

This would have added the above clause to the end of clause 203^[3] (which appears on p118 of the Bill), titled "General anti-abuse rule".

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• [1] Parliament's webpage on the Finance Bill (now the Finance Act 2013)
• [2] Finance Bill as introduced 28 March 2013
• [3] HMRC Guidance on the general anti-abuse rule (GARR) (See p10)

Debate in Parliament | Source |