Section 209
1(1)In this Part “the GAAR Advisory Panel” means the panel of persons established by the Commissioners for the purposes of the general anti-abuse rule.U.K.
(2)In this Schedule “the Chair” means any member of the GAAR Advisory Panel appointed by the Commissioners to chair it.
[F11AIn this Part “tax appeal” means—
(a)an appeal under section 31 of TMA 1970 (income tax: appeals against amendments of self-assessment, amendments made by closure notices under section 28A or 28B of that Act, etc), including an appeal under that section by virtue of regulations under Part 11 of ITEPA 2003 (PAYE),
(b)an appeal under paragraph 9 of Schedule 1A to TMA 1970 (income tax: appeals against amendments made by closure notices under paragraph 7(2) of that Schedule, etc),
(c)an appeal under section 705 of ITA 2007 (income tax: appeals against counteraction notices),
(d)an appeal under paragraph 34(3) or 48 of Schedule 18 to FA 1998 (corporation tax: appeals against amendment of a company's return made by closure notice, assessments other than self-assessments, etc),
(e)an appeal under section 750 of CTA 2010 (corporation tax: appeals against counteraction notices),
(f)an appeal under section 222 of IHTA 1984 (appeals against HMRC determinations) other than an appeal made by a person against a determination in respect of a transfer of value at a time when a tax enquiry is in progress in respect of a return made by that person in respect of that transfer,
(g)an appeal under paragraph 35 of Schedule 10 to FA 2003 (stamp duty land tax: appeals against amendment of self-assessment, discovery assessments, etc),
(h)an appeal under paragraph 35 of Schedule 33 to FA 2013 (annual tax on enveloped dwellings: appeals against amendment of self-assessment, discovery assessments, etc),
(i)an appeal under paragraph 14 of Schedule 2 to the Oil Taxation Act 1975 (petroleum revenue tax: appeal against assessment, determination etc),
(j)an appeal under section 102 of FA 2015 (diverted profits tax: appeal against charging notice etc),
(k)an appeal under section 114 of FA 2016 (apprenticeship levy: appeal against an assessment), or
(l)an appeal against any determination of—
(i)an appeal within paragraphs (a) to (k), or
(ii)an appeal within this paragraph.]
Textual Amendments
F1 Sch. 43 para. 1A inserted (15.9.2016) (with effect in accordance with s. 158(15) of the amending Act) by Finance Act 2016 (c. 24), s. 158(6)
2U.K.In this Schedule a “designated HMRC officer” means an officer of Revenue and Customs who has been designated by the Commissioners for the purposes of the general anti-abuse rule.
3(1)If a designated HMRC officer considers—U.K.
(a)that a tax advantage has arisen to a person (“the taxpayer”) from tax arrangements that are abusive, and
(b)that the advantage ought to be counteracted under section 209,
the officer must give the taxpayer a written notice to that effect.
(2)The notice must—
(a)specify the arrangements and the tax advantage,
(b)explain why the officer considers that a tax advantage has arisen to the taxpayer from tax arrangements that are abusive,
(c)set out the counteraction that the officer considers ought to be taken,
(d)inform the taxpayer of the period under paragraph 4 for making representations, and
(e)explain the effect [F2of—
(i)paragraphs 5 and 6, and
(ii)sections 209(8) and (9) and 212A.]
(3)The notice may set out steps that the taxpayer may take to avoid the proposed counteraction.
Textual Amendments
F2Words in Sch. 43 para. 3(2)(e) substituted (15.9.2016) (with effect in accordance with s. 158(15) of the amending Act) by Finance Act 2016 (c. 24), s. 158(7)
4(1)If a notice is given to the taxpayer under paragraph 3, the taxpayer has 45 days beginning with the day on which the notice is given to send written representations in response to the notice to the designated HMRC officer.U.K.
(2)The designated officer may, on a written request made by the taxpayer, extend the period during which representations may be made.
[F34A(1)If the taxpayer takes the relevant corrective action before the beginning of the closed period mentioned in section 209(8), the matter is not to be referred to the GAAR Advisory Panel.
(2)For the purposes of this Schedule the “relevant corrective action” is taken if (and only if) the taxpayer takes the steps set out in sub-paragraphs (3) and (4).
(3)The first step is that—
(a)the taxpayer amends a return or claim to counteract the tax advantage specified in the notice under paragraph 3, or
(b)if the taxpayer has made a tax appeal (by notifying HMRC or otherwise) on the basis that the tax advantage specified in the notice under paragraph 3 arises from the tax arrangements specified in that notice, the taxpayer takes all necessary action to enter into an agreement with HMRC (in writing) for the purpose of relinquishing that advantage.
(4)The second step is that the taxpayer notifies HMRC—
(a)that the taxpayer has taken the first step, and
(b)of any additional amount which has or will become due and payable in respect of tax by reason of the first step being taken.
(5)Where the taxpayer takes the first step described in sub-paragraph (3)(b), HMRC may proceed as if the taxpayer had not taken the relevant corrective action if the taxpayer fails to enter into the written agreement.
(6)In determining the additional amount which has or will become due and payable in respect of tax for the purposes of sub-paragraph (4)(b), it is to be assumed that, where the taxpayer takes the necessary action as mentioned in sub-paragraph (3)(b), the agreement is then entered into.
(7)No enactment limiting the time during which amendments may be made to returns or claims operates to prevent the taxpayer taking the first step mentioned in sub-paragraph (3)(a) before the tax enquiry is closed (whether or not before the specified time).
(8)No appeal may be brought, by virtue of a provision mentioned in sub-paragraph (9), against an amendment made by a closure notice in respect of a tax enquiry to the extent that the amendment takes into account an amendment made by the taxpayer to a return or claim in taking the first step mentioned in sub-paragraph (3)(a).
(9)The provisions are—
(a)section 31(1)(b) or (c) of TMA 1970,
(b)paragraph 9 of Schedule 1A to TMA 1970,
(c)paragraph 34(3) of Schedule 18 to FA 1998,
(d)paragraph 35(1)(b) of Schedule 10 to FA 2003, and
(e)paragraph 35(1)(b) of Schedule 33 to FA 2013.]
Textual Amendments
F3 Sch. 43 para. 4A inserted (15.9.2016) (with effect in accordance with s. 158(15) of the amending Act) by Finance Act 2016 (c. 24), s. 158(8)
[F44BU.K.Paragraphs 5 and 6 apply if the taxpayer does not take the relevant corrective action (see paragraph 4A) by the beginning of the closed period mentioned in section 209(8).]
Textual Amendments
F4Sch. 43 para. 4B inserted (15.9.2016) (with effect in accordance with s. 158(15) of the amending Act) by Finance Act 2016 (c. 24), s. 158(9)
5U.K.If no representations are made in accordance with paragraph 4, a designated HMRC officer must refer the matter to the GAAR Advisory Panel.
6(1)If representations are made in accordance with paragraph 4, a designated HMRC officer must consider them.U.K.
(2)If, after considering them, the designated HMRC officer considers that the tax advantage ought to be counteracted under section 209, the officer must refer the matter to the GAAR Advisory Panel.
[F5(3)The officer must, as soon as reasonably practicable after deciding whether or not the matter is to be referred to the GAAR Advisory Panel, give the taxpayer written notice of the decision.]
Textual Amendments
F5Sch. 43 para. 6(3) inserted (15.9.2016) (with effect in accordance with s. 157(30) of the amending Act) by Finance Act 2016 (c. 24), s. 157(11)
7U.K.If the matter is referred to the GAAR Advisory Panel, the designated HMRC officer must at the same time provide it with—
(a)a copy of the notice given to the taxpayer under paragraph 3,
(b)a copy of any representations made in accordance with paragraph 4 and any comments that the officer has on those representations, and
(c)a copy of the notice given to the taxpayer under paragraph 8.
8U.K.If the matter is referred to the GAAR Advisory Panel, the designated HMRC officer must at the same time give the taxpayer a notice which—
(a)specifies that the matter is being referred,
(b)is accompanied by a copy of any comments provided to the GAAR Advisory Panel under paragraph 7(b), and
(c)informs the taxpayer of the period under paragraph 9 for making representations, and of the requirement under that paragraph to send any representations to the officer.
9(1)The taxpayer has 21 days beginning with the day on which a notice is given under paragraph 8 to send the GAAR Advisory Panel written representations about—U.K.
(a)the notice given to the taxpayer under paragraph 3, or
(b)any comments provided under paragraph 7(b).
(2)The GAAR Advisory Panel may, on a written request made by the taxpayer, extend the period during which representations may be made.
(3)The taxpayer must send a copy of any representations to the designated HMRC officer at the same time as the representations are sent to the GAAR Advisory Panel.
(4)If no representations were made in accordance with paragraph 4, the designated HMRC officer—
(a)may provide the GAAR Advisory Panel with comments on any representations made under this paragraph, and
(b)if comments are provided, must at the same time send a copy of them to the taxpayer.
10(1)If the matter is referred to the GAAR Advisory Panel, the Chair must arrange for a sub-panel consisting of 3 members of the GAAR Advisory Panel (one of whom may be the Chair) to consider it.U.K.
(2)The sub-panel may invite the taxpayer or the designated HMRC officer (or both) to supply the sub-panel with further information within a period specified in the invitation.
(3)Invitations must explain the effect of sub-paragraph (4) or (5) (as appropriate).
(4)If the taxpayer supplies information to the sub-panel under this paragraph, the taxpayer must at the same time send a copy of the information to the designated HMRC officer.
(5)If the designated HMRC officer supplies information to the sub-panel under this paragraph, the officer must at the same time send a copy of the information to the taxpayer.
11(1)Where the matter is referred to the GAAR Advisory Panel, the sub-panel must produce—U.K.
(a)one opinion notice stating the joint opinion of all the members of the sub-panel, or
(b)two or three opinion notices which taken together state the opinions of all the members.
(2)The sub-panel must give a copy of the opinion notice or notices to—
(a)the designated HMRC officer, and
(b)the taxpayer.
(3)An opinion notice is a notice which states that in the opinion of the members of the sub-panel, or one or more of those members—
(a)the entering into and carrying out of the tax arrangements is a reasonable course of action in relation to the relevant tax provisions—
(i)having regard to all the circumstances (including the matters mentioned in subsections (2)(a) to (c) and (3) of section 207), and
(ii)taking account of subsections (4) to (6) of that section, or
(b)the entering into or carrying out of the tax arrangements is not a reasonable course of action in relation to the relevant tax provisions having regard to those circumstances and taking account of those subsections, or
(c)it is not possible, on the information available, to reach a view on that matter,
and the reasons for that opinion.
(4)For the purposes of the giving of an opinion under this paragraph, the arrangements are to be assumed to be tax arrangements.
(5)In this Part, a reference to any opinion of the GAAR Advisory Panel about any tax arrangements is a reference to the contents of any opinion notice about the arrangements.
12(1)A designated HMRC officer who has received a notice or notices under paragraph 11 must, having considered any opinion of the GAAR Advisory Panel about the tax arrangements, give the taxpayer a written notice setting out whether the tax advantage arising from the arrangements is to be counteracted under the general anti-abuse rule.U.K.
(2)If the notice states that a tax advantage is to be counteracted, it must also set out—
(a)the adjustments required to give effect to the counteraction, and
(b)if relevant, any steps that the taxpayer is required to take to give effect to it.
13(1)A designated HMRC officer may give a notice, or do anything else, under this Schedule where the officer considers that a tax advantage might have arisen to the taxpayer.U.K.
(2)Accordingly, any notice given by a designated HMRC officer under this Schedule may be expressed to be given on the assumption that the tax advantage does arise (without agreeing that it does).