Tax Collection and Management (Wales) Act 2016 section 81C

Artificial tax avoidance arrangements

Section 81C defines what makes a tax avoidance arrangement "artificial" and sets out the factors used to assess this, as well as the circumstances in which an arrangement will not be treated as artificial.

• A tax avoidance arrangement is artificial if entering into or carrying it out is not a reasonable course of action in relation to the relevant Welsh tax legislation.
• When assessing artificiality, consideration may be given to whether the arrangement has genuine economic or commercial substance beyond obtaining a tax advantage, and whether the resulting tax charge was an outcome not anticipated when the legislation was enacted.
• An arrangement is not artificial if, at the time it was entered into or carried out, it was consistent with generally prevailing practice that the Welsh Revenue Authority (WRA) had indicated it accepted.
• Where a tax avoidance arrangement forms part of wider arrangements, those wider arrangements must also be considered when determining whether the tax avoidance arrangement is artificial.

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