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What is the GAAR?

The GAAR (general anti-abuse rule) is a general approach to tackling tax avoidance. It seeks to counteract tax advantages arising from abusive tax arrangements. The counteraction is exercised by making adjustments on a just and reasonable basis. This guidance note refers to the GAAR as the UK GAAR to distinguish the provisions from the Scottish general anti-avoidance rule (Scottish GAAR) and the Welsh general anti-avoidance rule (Welsh GAAR) which have effect in relation to the devolved taxes (see the Scottish general anti-avoidance rule (Scottish GAAR) and Welsh general anti-avoidance rule (Welsh GAAR) guidance notes respectively).

Scope and priority of the UK GAAR

The UK GAAR takes priority over any other part of tax legislation and forms part of the UK's anti-avoidance framework.

The taxes covered by the UK GAAR are:

1. •

   income tax

2. •

   corporation tax (which includes any amount chargeable as if it were corporation tax or treated as if it were corporation tax)

3. •

   capital gains tax

4. •

   petroleum revenue tax (PRT)

5. •

   diverted profits tax (DPT)

6. •

   the apprenticeship levy

7. •

   inheritance