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Executive Summary

Land Reform Need Not Wait

Land reform has long been on the agenda in Scotland. The SNP made a firm commitment

to pursue a programme of land reform to ensure that ‘Scotland’s land be an asset that

benefits the many, not the few’. 1

This report finds:

Of the 62 proposals put forward in the detailed report 2 of the Land Reform Review

Group in May 2014, 58 could have been implemented with the powers Holyrood

currently holds.

Despite this, the draft legislation now being scrutinised by the Scottish parliament is

not a reflection of these recommendations, nor of the SNP’s claim that this constitutes

‘radical’ 3 land reform.

The Scottish government’s justification for dropping the proposal to limit ownership to

entities registered in an EU state - an attempt to address tax-haven registration - does

not stand up to scrutiny, and the measure should be inserted into the draft bill as a

matter of urgency.

Land Value Taxation was frequently mentioned as a priority in the public consultation,

but does not appear in the draft bill. This is unacceptable given the importance of such a

measure to any coherent and effective land reform agenda.

RISE: Scotland’s Left


Who We Are

We are a pro-independence left-wing alliance launched in 2015. The alliance aims to

provide a socialist alternative to neoliberalism in Scotland.

Contact Us

You can visit our website - rise.scot - for full information. Press contacts are Jonathon

Shafi, who can be reached on 07983 537187, and Ken Ferguson, 07925 613145.

1. http://www.bbc.co.uk/news/uk-scotland-scotland-politics-30193791

2. http://www.scotland.gov.uk/Resource/0045/00451597.pdf

3. http://www.snp.org/media-centre/news/2014/nov/nicola-sturgeon-address-snp-conference

The Evidence Examined

Tax Havens

A key proposal missing from the draft of the Land Reform (Scotland) Act 2015 is a

measure to prevent the ownership of Scottish land by companies registered in offshore

tax havens.

The link between corruption, offshore corporate property and land ownership

is clearly established in a recent Transparency International report 4 . Land owned

in offshore jurisdictions such as the British Virgin Islands, Jersey and Guernsey is

particularly common in London, and 75% of properties under investigation for corruption

are using offshore ownership to hide their identities. The problem is not confined to

southeast England, however. A Private Eye investigation 5 recently found that as much as

750,000 acres in Scotland, particularly Highland estates, are owned in offshore tax

havens. This makes it potentially impossible to find the real owners as there can be a

series of shell companies and trusts. Particularly if they are registered in these offshore

‘secrecy’ jurisdictions, the legal means to reveal ownership are not available.

Consequently, the LRRG made a strong recommendation to tackle the problem:

The Review Group recommends that the Scottish Government should make

it incompetent for any legal entity not registered in a member state of the

European Union to register title to land in the Land Register of Scotland, to

improve traceability and accountability in the public interest. 6

This provision duly appeared in the public consultation, which was open from 2

December 2014 to 10 February 2015. Of the 1,269 responses, the vast majority were

from individuals. The remainder came from estates, NGOs, public bodies and commercial

groups. A very clear pattern emerges from the consultation responses - a large majority

of individual respondents strongly supported almost every measure proposed, while

the group of estates, landowner organisations and associated lawyers and estate agents

opposed many of the measures 7 .

This pattern can be seen in the tax haven proposal, with which 82% individual

respondents and 69% organisation respondents agreed. Among private landowner

organisations and private sector/professional respondents, however, only 34 and 35%

respectively agreed with the proposal. That the proposal was then dropped raises

questions about the consideration given to the consultation responses by the Scottish


The Scottish Government’s justification for dropping the measure, however, is that

it would not be effective. It states that the measure ‘would not have significantly

increased the accountability and traceability of land owners in Scotland’ 8 .

4. http://www.transparency.org.uk/publications/15-publications/1230-corruption-on-your-doorstep/1230-corruptionon-your-doorstep

5. http://www.andywightman.com/docs/privateeye_1395_26Jun2015.jpg

6. http://www.gov.scot/Publications/2014/05/2852/298195

7. http://www.gov.scot/Resource/0047/00477022.pdf

8. http://www.scottish.parliament.uk/S4_Bills/Land%20Reform%20(Scotland)%20Bill/b76s4-introd-pm.pdf

As much as 750,000

acres in Scotland,

particularly Highland

estates, are owned in

offshore tax havens


The argument was that EU states do not necessarily provide any guarantee of

transparency. This approach ignores the recent EU directive on money laundering,

which mandates that ‘central registers be kept of the ultimate beneficial owners of

….legal entities’. 9 Though this will not be a magic bullet in corporate accountability and

transparency, it surely should not be ignored in consideration of legislation.

The Scottish Government also argued that this measure would not prevent complex

company structures and land being held in trust, both of which obstruct transparency

and accountability. This is true - for instance, the largest landowner in Scotland, the

Duke of Buccleuch, owns his properties through a complicated web of shell companies

and trusts. 10 But this is not sufficient for dropping the measure entirely. There are

many legal entities currently owning land in Scotland which are registered in offshore

jurisdictions such as the British Virgin Islands and Guernsey. The LRRG’s proposal would

have addressed this situation and should therefore be re-instated in the draft of the Land

Reform (Scotland) Act 2015.

The problem of secrecy, tax avoidance and corruption in the property market is so bad

that Transparency International warned, ‘Britain is in danger of becoming a country for

corrupt capital.’ 11 The UK government’s proposals to crack down on corruption in

offshore ownership 12 , though not particularly robust, now represent a more radical

and pro-active stance than our own government are willing to pursue.

Land Value Taxation

One recommendation carried forward (in part) was the re-establishment of business

rates for sporting estates. The revenue raised is to be put into the Scottish Land Fund,

which grants money to communities seeking to buy their land. The Fund will now receive

£10m per year until 2020, which is a substantial increase, and is to be welcomed. The

larger issue remains, however, that this substantial figure becomes far less so when the

vastly inflated price of land is taken into consideration. If one small island costs almost

£2,000,000 13 and farmland has soared to £10,000 per acre - a fact actually celebrated

by landowning bodies 14 - then the ability of a government land fund to help more than

a handful of communities succeed in buyout bids must be questioned. As ever, it is

the cost of land which must be addressed by government action; other measures,

while welcome, are sticking-plaster solutions.

As such, the strong recommendation of the LRRG that Land Value Taxation be seriously

considered in a detailed study was a vital one. This recommendation did not even

make it into the consultation, let alone the bill. The Scottish government responded,

‘No work initiated. Potential for this to be within scope of our manifesto commitment

to “consult with others to produce a fairer system based on ability to pay to replace the

Council Tax”’. 15 This is a deflection, and given that the Commission on Local Tax Reform

9. http://www.europarl.org.uk/en/media/news/uknews2015/jan15/antimoneylaundering.html

10. http://www.andywightman.com/archives/942

11. http://www.theguardian.com/uk-news/2015/mar/04/uk-properties-held-by-offshore-firms-used-in-globalcorruption-say-police

12. http://www.ft.com/cms/s/0/4d83097a-34ef-11e5-bdbb-35e55cbae175.html#axzz3odKGYgsT

13. http://www.ckdgalbraith.co.uk/property/inv120050-tanera-mor-summer-isles-achiltibuie-ullapool-wester-rossiv26-2yn

14. http://www.scottishlandandestates.co.uk/index.php?option=com_content&view=article&id=2227:scottishfarmland-performing-well&catid=71:national&Itemid=107

15. https://consult.scotland.gov.uk/land-reform-and-tenancy-unit/land-reform-scotland/supporting_documents/


The UK government’s

proposals to crack down

on corruption in offshore

ownership, though not

particularly robust,

now represent a more

radical and pro-active

stance than our own

government are willing

to pursue.

has been running for a decade now, it suggests that those interested in land value

taxation should not hold their breath. Given that the need for a supporting system of

taxation to accompany land reform measures was rated as one of the top three priorities

by respondents to the government’s consultation on land reform, its absence suggests a

failure to reflect the views of these respondents. 16

These legislative proposals are currently being examined by the Rural Affairs, Climate

Change and Environment Committee. Subsequently there will be a chance for scrutiny by

the parliament and for amendments. RISE believe that the draft bill, as it currently

stands, is weak and will not tackle the fundamental inequalities caused by our

system and pattern of landownership in Scotland.

What would RISE do?

RISE is currently bringing together our collectively agreed policy platform. The following

are ideas which outline a radical approach to Land Reform.

• Landholding size: Cap the amount of land any one entity or individual can hold

• Tax havens: Make the purchase of land by entities registered outwith the EU illegal, in

order to crack down on offshore tax haven ownership. Applied retrospectively.

• Information: Only 21% land in Scotland is on the register, and it’s not freely

accessible. Establish an accessible, online, map-based register and ensure it is

completed within 10 years.

• Compulsory purchase: communities should have the right to request compulsory

purchase orders

• Taxation: Establish a system of land value taxation. Tax second homes and holiday

homes heavily to help address the rural housing crisis.

• Tenant Farmers: would be granted automatic right-to-buy

• Succession law: Modernise the law to remove the distinction between moveable and

immoveable property that has permitted the continuation of such vast tracts of land

• Planning: reform the planning system to encourage small-scale, affordable

developments including self-build and hutting

16. http://www.gov.scot/Resource/0047/00477022.pd



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