Revenue Scotland and Tax Powers Act 2014 section 72

General anti-avoidance rule: commencement and transitional provision

Section 72 explains when the general anti-avoidance rule starts to apply and how it interacts with arrangements that were already in place before it came into force.

• The general anti-avoidance rule only applies to tax avoidance arrangements entered into on or after the date Part 5 of the Act came into force.
• If a tax avoidance arrangement is part of a wider set of arrangements that were entered into before that date, those earlier arrangements are generally disregarded when deciding whether the avoidance arrangement is "artificial".
• However, the earlier arrangements must be taken into account if doing so would show that the tax avoidance arrangement is not artificial — in other words, earlier arrangements cannot be ignored if they provide a legitimate explanation for the arrangement.
• The effect is to prevent taxpayers from relying on pre-existing arrangements to justify avoidance, while also ensuring that genuinely non-artificial arrangements are not unfairly caught by the rule.