Plans to change how our countryside is managed will make a big difference to both rural and urban areas, says Robert Scott-Dempster
WHILE the impending independence referendum may be regarded, depending on outcome, as a transformational moment in shaping the Scottish nation, a somewhat less-heralded initiative could have greater impact on the physical landscape of our country and the way in which it is managed.
I refer to the Land Reform Review Group (LRRG) report published in late May which, in its 253 pages, contains over 60 wide-ranging recommendations. If implemented, these would have far-reaching effects.
The LRRG acknowledge that the role of the report is to provide an overview which brings together some of the many important issues associated with the ownership of Scotland’s land, and identify ways in which land reform measures could help tackle these issues in line with the three objectives in the LRRG’s remit (as set by the Scottish Government). These are to:
• Enable more people in rural and urban Scotland to have a stake in the ownership, governance, management and use of land which will lead to greater diversity of land ownership, and ownership types, in Scotland.
• Assist with the acquisition and management of land (and also land assets) by communities to make stronger, more resilient, and independent communities which have an even greater stake in their development.
• Generate, support, promote and deliver new relationships between land, people, economy and environment in Scotland.
While the report’s contents are only recommendations at this stage, it does have wide political support across all parties and Scottish ministers have stated that they are committed to the process of land reform, so all those who own land or are involved in farming or make their living from rural businesses must consider that its potential impact is likely to be substantial.
Among the most important topics upon which recommendations are made are the following:
• Taxation – There is a notable focus on changing various aspects of taxation, not least the possibility of introducing a Land Value Tax. The report questions why agriculture, forestry and other land-based businesses should be excluded from paying rates and queries the abolition of sporting rates.
The LRRG challenge the existing reliefs from Inheritance Tax for agricultural and business property and also questions the availability of “roll over” relief from Capital Gains Tax. A re-introduction of Inheritance Tax on farms in some form would make a significant difference to all farming businesses, even if that tax were payable by instalments.
• Succession – The report recommends including heritage (ie land and buildings) within the scope of legal rights which a spouse and children can claim on a deceased’s estate regardless of the terms of the will. Currently this only extends to moveables (non-land).
• Agricultural Leases – A major, but relatively simple, change suggested affects the 1991 Act tenant’s “right to buy”. Currently, such tenants have to register in order to be entitled to exercise their right to buy. The proposal is that such registration should become automatic. The LRRG also support an enhanced Right to Buy and suggest that it would be a good thing if more traditional tenants owned their farms.
• Residential Lettings – The LRRG wants to encourage longer, more secure tenancies in the private rented sector. Currently, the main providers of rural affordable housing are landowners but such a change could cause many to reassess letting their properties. Interestingly, this particular recommendation could also have a major impact on residential lets in towns and cities. • Country Sports – The report recommends the reintroduction of sporting rates which could impact not only on the numbers employed directly in operating country sports, but also on the hospitality and retail sectors which support tourists participating in such activities.
These are some of the main recommendations of the report, a document that represents a major incursion into the current rights of private landowners. If all the recommendations were implemented they would have an enormous impact on private land ownership and how Scotland’s land would be managed in future.
The cost of such change would be very substantial and to arrive at the point of enacted legislation these recommendations will need to be debated, costed and critically examined from a legal perspective.
Earlier this month environment and climate change minister, Paul Wheelhouse MSP, stated that the report is “a major milestone in taking forward Scotland’s land reform journey” and, in the same speech, announced that a Land Reform Bill will be introduced before the end of the current term of the Scottish Parliament.
Thus we can say for certain that reform in one shape or another is coming and that it will certainly impose a far greater degree of public involvement in, and control over, private landownership, together with substantially increased visibility of the ownership and use made of that land.
• Robert Scott-Dempster is head of land and rural business at Gillespie Macandrew LLP www.gillespiemacandrew.o.uk