GAAR announcement might scare wealthy entrepreneurs from UK shores
EY Budget reaction: Patrick Stevens, a tax partner at EY comments on how the General Anti Avoidance Rule (GAAR) will impact individuals:
“The General Anti-Avoidance Rule (GAAR) announced by the Chancellor in today’s Budget will increase uncertainty for individuals in managing their tax affairs and may dissuade wealthy entrepreneurs from settling in the UK.
“Uncertainty about their personal tax affairs will have a major impact on entrepreneurs seeking to re-locate here. Those coming to the UK from overseas have already been faced with changes to the tax rules for non-domiciled individuals and changes to the residence rules in recent years. This consultation sends out the message that the UK has an uncertain tax regime and as a result maybe not the best place to base oneself.
“Aaronson’s report on the GAAR published in the autumn suggested that an anti-avoidance rule would be designed only to prevent the most aggressive of tax avoidance. However, the anti-avoidance rule which he suggested was much more wide ranging than this, particularly individuals, and may sweep in many ordinary tax planning decisions. For example, an individual’s choice to change the property which is nominated as their main residence and qualifies for capital gains tax relief.”