RSTP8003 - Determining when the Scottish GAAR applies

RSTPA guidance on the conditions that must apply before counteraction can be taken under the Scottish GAAR against an artificial tax avoidance arrangement.

We may take counteraction under the Scottish GAAR (see RSTP8006) where in our opinion:

  • you have entered into a tax avoidance arrangement (see RSTP8004); and
  • that arrangement is artificial (see RSTP8005).

Both conditions must be met for counteraction under the Scottish GAAR to apply. We cannot therefore take counteraction measures against:

  • a tax avoidance arrangement which is not artificial; or
  • an arrangement which is artificial but not a tax avoidance arrangement.

We reserve the right to counteract tax avoidance without reference to the Scottish GAAR. For example, if we think tax avoidance activity is ineffective under the plain meaning of the devolved tax legislation we may take action to recover unpaid tax on that basis. Where the devolved tax legislation provides for TAARs we may invoke those TAARs.

Application of the GAAR will be subject to appropriate internal governance arrangements within Revenue Scotland.

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