General Anti-Abuse Rule (GAAR) amendments

16 July 2019


The 2019-20 Finance Bill draft legislation includes a measure to introduce some minor technical and procedural amendments to the General Anti-Abuse Rule (GAAR) to ensure it operates effectively.


The draft legislation outlines a new protective GAAR notice to replace the existing provisional counteraction notice (PCN). The new notice will enable HMRC to carry on its investigations beyond 12 months and mirrors the way normal tax enquiries work.


As a safeguard, taxpayers will be able to take their appeal against any proposed GAAR adjustment to tribunal 12 months after the protective GAAR notice is issued (reflecting the existing 12-month window during which appeals cannot be progressed whilst HMRC carries out its enquiries).


The changes will also confirm that where HMRC decides not to pursue the GAAR, cases can still be pursued using a technical non-GAAR argument, which has always been the intention of the legislation.


The new protective GAAR notice will have effect in relation to notices issued on or after the date of Royal Assent to Finance Bill 2019-20.


Draft legislation and the associated explanatory note and technical note (as announced at Budget 2018) can be found within the Technical and procedural amendments to the General Anti-Abuse Rule.