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Scottish Executive holds key
Who owns Scotland?: A short-term answer
Torcuil Crichton, Sunday Herald, 5th October 2003
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Land Reform legislation of the type required to end the
large-scale tax
avoidance under the cover of secret ownership of the countryside hardly
registers on the UK government agenda.
However, an opportunity to lever land tax and tax up the political agenda is
sitting in the lap of the Scottish Executive.
The Scottish Law Commission is currently planning a review of the Land
Registration (Scotland) Act 1979 and the law of trusts in what is basically a
technical and legalistic tidying up job.
At present, the Act requires all property sales to be recorded at the
Land
Register in Edinburgh. While the names of companies carrying out the deals must
be recorded, there is no obligation to reveal the real identity of the owners.
Because of that, large areas of Scotland’s land are held in secret ownership by
offshore companies beyond the reach of UK tax authorities.
It would take ministerial direction from the Scottish Executive for the
Law
Commission review to incorporate concerns over land ownership transparency. The
same concerns have already been raised with the UK government in the
2001 Review
of the English and Welsh Land Registry
by Andrew Edwards, but they have not been
acted on.
Legislation in Scotland requiring the revelation of true ownership could
outlaw the ownership of property by nominee companies, offshore firms and
private trusts. Simultaneous or subsequent legislation would be required in
England and Wales, as the Edwards report recommended, but Scotland would be seen
to have taken a lead in ending the secret system of land ownership and tax
avoidance in Britain.
Simply requiring all owners of land to register their true controlling
interests would be a starting point. Nobody really knows who owns most of
Scotland. The Land Register is incomplete and, were it not for the work of the
late John McEwen, a retired forester who produced the original Who Owns
Scotland book in 1977, little would be known.
It took another forester, Andy Wightman, to pick up where McEwen left off and
produce the most comprehensive register of
Who Owns Scotland
to date. Wightman
has been at the forefront of balanced and progressive arguments for land reform
for the past decade and is keenly aware of the need for a complete land register
as a first step to reform.
What might make the Treasury finally act is that the rising value of urban
properties is prompting middle-income families to consider setting up trust
companies fore their own homes, so avoiding inheritance tax when they die and
the properties pass on to their children. At today’s rate, the first £255,000
inherited is tax-free, with any remaining legacy taxed at 40 percent. According
to accountants, more and more urban clients are considering the tricks used by
wealthy rural landowners to avoid paying tax.
© Sunday Herald 2003 www.sundayherald.com
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Further Information
Visit the Who Owns Scotland website www.whoownsscotland.org.uk
for details of who the private owners of rural Scotland are.
The Scottish Law Commission’s review of Land Registration in Scotland is
available as a consultation paper:
Scottish Law Commission, Discussion Paper No 125
Discussion Paper on Land Registration: Void and Voidable Titles
http://www.scotlawcom.gov.uk/downloads/dp125_land_reg.pdf
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