GAAR effect on normal tax planning

KEY POINTS

• The general anti-abuse rule is moving from its theoretical base into practical tax areas.
• Would the anti-abuse rule apply to standard tax planning arrangements?
• Using a discretionary trust to transfer property tax free.
• Obtaining a tax advantage was the main purpose of the arrangements.
• The legislative tests to determine whether a tax arrangement is abusive.
• The professional obligation to document the work performed to conclude that the GAAR does not apply.

From being something of a theoretical exercise the general anti-abuse rule (GAAR) is now a reality. This was borne out in my article ‘Start of something big’ (Taxation 17 August 2017) – which reviewed the GAAR panel’s ruminations on whether an arrangement fell within the general anti-abuse rule  – and a subsequent...