1. © 2012 Grant Thornton UK LLP. All rights reserved. Anti Avoidance in 15 Minutes! Neil Pamplin Grant Thornton UK LLP Corporate and International Tax Tel (0)20 7728 2778 E neil.c.pamplin@uk.gt.com FD Academy.pptx

2. © 2012 Grant Thornton UK LLP. All rights reserved. So why the headlines? Jimmy Carr - fastest descent down K2 Starbucks Amazon Google not forgetting Sir Alex and Sven

3. © 2012 Grant Thornton UK LLP. All rights reserved. UK Open for business - as a tax haven? Corporate tax rate down to 20% 127 Treaties in place - incl. one of the strongest with US and China Participation exemptions –tax free dividend remittance –tax free disposals of subsidiaries light(er than feared) CFC regime generous enhanced R&D tax reliefs

4. © 2012 Grant Thornton UK LLP. All rights reserved. UK open for business - a tax haven? Patent Box regime - 10% corporation tax rate! Foreign Finance Company Exemption…a 5% tax rate!! no withholding tax on dividends paid by UK cos. income tax rates declining….albeit to a still high 45% at the top end - invites tax planning? generous (?) reliefs for entrepreneurs - 10% CGT and non domicile advantages

5. © 2012 Grant Thornton UK LLP. All rights reserved. TAAR's vs GAAR CFC legislation still onerous Transfer Pricing legislation Unallowable purpose, WWDC, anti arbitrage transfer of assets abroad rules commercial purpose Transactions in Securities regulations host of specific SDLT measures DOTAS rules

6. © 2012 Grant Thornton UK LLP. All rights reserved. The 2013 Budget "one of the largest ever packages of tax avoidance and evasion measures presented…" The Chancellor £4.6bn new financial disclosure agreements signed with the Isle of Man - with Jersey and Guernsey to come…and the BVI? and Cayman? plus….the GAAR

7. © 2012 Grant Thornton UK LLP. All rights reserved. and now the GAAR, the "catch all" rule? from now? General Anti Abuse Rule –to target "aggressive" tax avoidance arrangements –to help tackle "abusive avoidance" - per the leg'n applies to: –Income and corporation taxes –CGT, IHT, SDLT

8. © 2012 Grant Thornton UK LLP. All rights reserved. Meaning of "abusive" and "arrangements" having regard to all the circumstances, it would be reasonable to assume that obtaining a tax advantage was the main purpose, or one of the main purposes abusive if arrangements are not considered reasonable –contrived or abnormal steps –to exploit shortcomings in legislation

9. © 2012 Grant Thornton UK LLP. All rights reserved. Expectation vs fact vs uncertainty expectation that will be applied to Starbucks? –NO Treasury - the GAAR is narrowly defined and will only impact the most abusive of tax avoidance £235m over 5 years comparison with overseas GAARs overriding concern is one of uncertainty and complexity

10. © 2012 Grant Thornton UK LLP. All rights reserved. Conclusion It will be used sparingly and aimed at the most abusive cases and structures eg. K2. NOT aimed at normal commercial transactions and therefore not intended to catch Starbucks. Overriding message is "carry on as before".