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The latest opinion of the general anti-abuse rule (GAAR) panel (tinyurl.com/dct4pkrn) comes as no real surprise. At its heart, this was another employee benefit trust loan arrangement but with some bells and whistles intended to break the connection between the employment and the loan. I doubt that many readers will take issue with the panel’s conclusions.
The more interesting question is whether this takes us any further forward in understanding where the limits of the GAAR are to be found. In all of the opinions to date there seemed to be little doubt that the panel would find against the scheme. Indeed had those schemes been tested through litigation they would probably have been found to be ineffective under a purposive interpretation of the legislation.
What would be interesting would be for the panel to consider a piece of planning which the courts might be likely to uphold and where there is genuine doubt about whether it would be caught by the GAAR. That would help to signpost where the boundaries lie. At some point this may happen, but one can see why HMRC might be reluctant to refer such a case: without a clear map taxpayers are more likely to avoid the area completely.
The GAAR has more or less settled down now and I do not think it has had a significant impact on the day-to-day work of most advisers, other than to make them stop and think before they press the button on complex advice. There seems to be little clamour for revision at the moment but, in the uncertain political and economic environment as we emerge from the pandemic, that could change quickly.
