HMRC published its General Anti-Abuse Rule (GAAR) guidance, as approved by the GAAR advisory panel, on 15 April 2013.

The purpose of the guidance is two-fold:-

  1. to give, in layperson's language, a broad summary of what the GAAR is designed to achieve and how it operates to achieve it; and
  2. to be an aid to the interpretation and application of GAAR by discussing its purpose and providing examples of its application.

Part A sets out the purpose and status of the guidance and Part B provides a summary of what GAAR is designed to achieve and how it will operate to achieve it. Part C looks at some of GAAR's key concepts, including the main tax purpose test and the double reasonableness test - the latter of which is expressed (at C5.10.1) as being the "crux of the GAAR test".

The guidance makes it clear that the GAAR's main objective is to deter taxpayers from entering into abusive arrangements and that it aims to deter the promotion of such arrangements. Part D of the guidance provides a comprehensive list of examples that - in HMRC's view - illustrate when an arrangement might or might not be treated as abusive in the context of the GAAR. However, the guidance does make it clear that the examples are not intended to provide any indication of HMRC's approval or acceptance of a particular arrangement and that each case will depend on its own facts and context.

Part E sets out HMRC's guidance on the GAAR procedure. This section did not require the approval of the Advisory Panel.