ABSTRACT
This chapter examines the scope of discretion that may be available to judges in applying the provisions of the GAAR. Although Parliament may have intended for the GAAR to be examined by the judiciary in general manner, this approach is undesirable as wide discretion can cause uncertainty for taxpayers and inconsistencies in applying the GAAR. The wide nature of the GAAR unavoidably leaves room for judicial discretion. The implications of this will be examined. The width of the GAAR is largely due to the fact that the core provision which lays down what abusive arrangement means is then divided and subdivided to provide a multitude of definitions for each of the key terms. The problematic breadth of the GAAR stems from the fact that the terms “abusive” and “arrangement” have been separated and defined again in the GAAR. The argument that “statutes, common law rules are often vague and must be interpreted” is convincing, particularly with the ambiguous UK GAAR.
