The GAAR catches transactions in (7). It doesn’t catch people transacting in (4), (5), (6) or (8).
Without a GAAR specific penalties regime, the GAAR does not always create an effective disincentive to transacting in (7). People can transact and take a punt on escaping a GAAR counteraction. For many there will be but modest downside to a counteraction – some hassle and professional fees but with a huge potential tax gain. The same is even more true for those transacting in (6).
With a GAAR specific penalties regime, no one will transact in (7). People will absolutely be put off transacting in (6). I think these are ‘pro’s. The potential ‘con’ is whether people would be put off transacting in (5). I think not because I think (6) creates ample clear water between (5) and (7).
CLASSES OF AVOIDANCE TRANSACTION