What would a general anti-avoidance provision look like?

Posted on

I was discussing this question with a friend today. He wanted to know what such a provision would look like. I said I’d been told by HMRC that they could not develop the wording for such a provision, but he found that hard to believe. So do I. So, I offer the wording for such a provision here:

General Anti Avoidance Provision

  1. If when determining the liability of a person to taxation, duty or similar charge due under statute in the United Kingdom it shall be established that a step or steps have been included in a transaction giving rise to that liability or to any claim for an allowance, deduction or relief, with such steps having been included for the sole or main purpose of securing a reduction in that liability to taxation, duty or similar charge with no other material economic purpose for the inclusion of such a step being capable of demonstration by the taxpayer then subject to the sole exception that the step or steps in question are specifically permitted under the term of any legislation promoted for the specific purpose of permitting such use, such step or steps shall be ignored when calculating the resulting liability to taxation, duty or similar charge.
  2. In the interpretation of this provision a construction that would promote the purpose or object underlying the provision shall be preferred to a construction that would not promote that purpose or object.

It probably is not perfect. I’m open to offers for amendment.

But I think that would work. Anyone want to disagree?

Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:

You can subscribe to this blog's daily email here.

And if you would like to support this blog you can, here: