On 11 December 2017, the General Anti-Abuse Rule (GAAR) Advisory Panel published a further opinion, concluding that a scheme designed to exploit the close company “loans to participators” legislation was abusive.

The taxpayers argued that the arrangements in question, which involved the use of two offshore trusts with a Cyprus company (associated with the scheme promoter) as sole trustee, had the effect that (1) no loans to participator charge arose as the loan in question was repaid, and (2) the distributions tax charge is not engaged as no value was extracted from the company. The Panel had “no difficulty” in reaching its unanimous conclusion that, taking into account the relevant GAAR criteria, entering into the arrangements involved in the scheme was not a reasonable course of action.

At the same time, the Panel published further opinions on schemes largely similar to those the subject of the Panel’s first published opinion (on which, see our earlier commentary, here.

The Panel opinions (and further details as to the arrangements in question) can be viewed here.