Final answer:
The controller is engaging in tax avoidance, which unlike tax evasion is a legal way to minimize tax liabilities by making use of provisions in the tax laws.
Step-by-step explanation:
When the controller of Little Company Ltd. has decided to sell a piece of capital equipment after the company's year-end to avoid paying tax on capital gains this year, this action would most accurately be categorized as tax avoidance. Tax avoidance is the legal use of tax laws to reduce one's tax burden. Unlike tax evasion, which is illegal, tax avoidance is performed within the bounds of the law. Furthermore, GAAR (General Anti-Avoidance Rule) is a set of broad and general principles laid out by the tax laws of many countries to prevent tax avoidance and stop transactions or arrangements that are made specifically to avoid taxes. By delaying the sale of an asset to a subsequent fiscal period to utilize lower capital gains taxation, the controller is planning around the tax implications to benefit the company without breaking the law.