Taxes Consolidation Act 1997 section 811C

Transactions to avoid liability to tax

Section 811C contains the general anti-avoidance rule (GAAR), which applies to transactions commenced after 23 October 2014 and empowers Revenue to deny or withdraw tax advantages arising from tax avoidance transactions.

• A tax avoidance transaction is one where, having regard to its form, substance and outcome, it is reasonable to consider that it gives rise to a tax advantage and was not undertaken primarily for purposes other than obtaining that advantage — an objective test.
• A transaction is not a tax avoidance transaction if it was carried out with a view to realising profits in the ordinary course of business, or if it involves the legitimate use of a statutory relief without misuse or abuse of that relief.
• Revenue may deny or withdraw a tax advantage at any time by making or amending assessments, allowing or disallowing credits and deductions, or recharacterising payments, and there is no statutory time limit on these powers.
• A person found to have claimed a tax advantage contrary to the GAAR is liable not only for the additional tax but also for interest from the date the tax would originally have been due and a tax avoidance surcharge of 30% of the tax advantage.