The art of dodging tax without actually breaking the law or lawfully carrying out of taxation to missing tax liability. Tax avoidance is said to be legal if it does not break the law.
Contrasted with tax evasion-non payment of due tax that law charges on ones income.Legislture may proceed to seal loopholes that give a tax avoidance opportunity while tax payers look for opportunities within law that limit payment of taxes.
Reactions have been varied. The judiciary tends to be friendly if the taxpayer has not stretched the law to engage in tax avoidance.
Lord Sumnre in I.R.C v Executors observed the highest authorities have always recognized that subject is entitled so to arrange his affairs as not to attract taxes imposed by the crown so far as he can do so within the law and that he may legitimately claim advantage of any terms or omissions he can find in his favor in the taxing statutes in so doing, neither has a liability nor incurs claims.
Levin v I.R.C
His majesty subjects are free if they can, to make their own arrangements so that their cases may fall outside the scope of taxing Acts, they incur no legal penalties and no moral censure if having considered lines drawn by legislature for imposition of taxes they make it their business to work outside them