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News - 21 May 2013

GAAR (General Anti-Abuse Rule) update.

The GAAR (General Anti-Abuse Rule) is to be effective from Royal Assent of the Finance Bill, which will most likely be around 20 July 2013.

Tonmoy Kumar, Manager of the Accounts Department of ABDS comments:
“Although we do not expect the GAAR to be focussed upon commercial transactions where a tax saving is one of the consequences, it will, nevertheless, produce uncertainty until there is some experience in the GAAR’s use and effectiveness in the courts.”

Stuart Coleman, Manager of the Tax Department of ABDS comments:
“Although the Government has stipulated that only ‘abusive’ tax planning will be targeted; in practice, and over time, the net may be widened to outlaw other planning such as specialist profit extraction strategies.”

However, there is currently a new opportunity whereby clients who take some simple steps prior to the introduction of the new GAAR, may be able to continue for many years with this specialist tax planning after the introduction of GAAR

Some of the areas to consider include:
• Current year profit extraction - May to Dec '13 year-ends
• Post year-end profit extraction - Sept '12 to March '13 year-ends
• Rebalancing overdrawn DLA's
• Cash reserves extraction


If you would like to know more about this option for clients, please contact Lavinia Newman, Stuart Coleman or Tonmoy Kumar to discuss how ABDS can help.


ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail: abds@netaccountants.net

Great with People  Brilliant with Numbers Clear and Precise with Words

 

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