For an overview of the Budget 2012 visit our website http://www.eavesandco.co.uk/links/Budget2012.pdf
A general anti-avoidance tax rule has been muted as being appropriate for the UK for a long time. It now looks a genuine possibility following the Aaronson Report.
The idea of such a rule is to draw a line akin to a test of what the tax rules are intended to achieve ie their spirit. If a transaction crosses that line, even though it is within the wording of the legislation, it will be caught.
Any general rule of this nature must be drawn at the right level so as to not impinge on innovative but “within the spirit” planning.
If such a rule was implemented it would be interesting to see whether the specific anti-avoidance rules in the existing legislation will be scrapped. This would probably more than halve the content of the legislation.