Skip to content

ACCA Applied Skills · Taxation (UK) · Principal sources of revenue law and practice

Which one of the following is the purpose of the General Anti-Abuse Rule (GAAR) in the UK?

The GAAR exists to counteract tax advantages that arise from abusive tax arrangements, even when those arrangements comply with the literal wording of the legislation. It targets abuse, not late filing, and it is not a clearance procedure guaranteeing acceptance of planning.

  1. ATo counteract tax advantages arising from abusive tax arrangements, even if they comply with the literal wording of the legislationCorrect
  2. BTo impose criminal penalties on taxpayers who fail to submit returns by the filing date
  3. CTo allow HMRC to open a compliance check into any return without giving notice
  4. DTo provide taxpayers with a clearance procedure guaranteeing that planning will be accepted

Explanation

The GAAR lets HMRC counteract tax advantages from abusive arrangements, even where the arrangements technically follow the legislation. It is not a penalty regime for late returns, and it is not a clearance service for taxpayers. Compliance check powers are a separate matter.

Did you get it right without looking?

One question tells you little. A timed set on Principal sources of revenue law and practice shows your real accuracy, how long you take and where you lose marks.

Practise Principal sources of revenue law and practiceFree diagnostic mock

More Principal sources of revenue law and practice questions