Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 section 66

General anti-avoidance rule

Section 66 introduces a General Anti-Avoidance Rule (GAAR) into Welsh tax law, giving the Welsh Revenue Authority (WRA) power to counteract tax advantages arising from artificial tax avoidance arrangements relating to devolved taxes.

• An arrangement is a tax avoidance arrangement if obtaining a tax advantage is its main purpose or one of its main purposes, and it is considered artificial if entering into it is not a reasonable course of action in relation to the relevant Welsh tax legislation.
• The WRA can make adjustments it considers just and reasonable to counteract tax advantages from artificial avoidance arrangements, but must first issue a proposed counteraction notice and then a final counteraction notice, giving the taxpayer at least 45 days to make representations.
• An arrangement is not treated as artificial if it was consistent with generally prevailing practice at the time and the WRA had indicated its acceptance of that practice.
• In any court or tribunal proceedings, the burden of proof falls on the WRA to demonstrate that an artificial tax avoidance arrangement exists and that its proposed adjustments are just and reasonable.