Land reform in a Net Zero Nation: consultation paper

Part 11: Transparency: Who owns, controls and benefits from Scotland's Land

The importance of understanding who owns, controls and benefits from Scotland's Land

Scotland, and Scotland's land, represent attractive opportunities for investors within Scotland, from UK, the EU and beyond. The Scottish Government is committed to ensuring that inward investment in Scotland's land is conducted in a responsible manner, and we are committed to ensuring transparency of land ownership so that the public can have a real understanding of who owns, controls and benefits from Scotland's land. This understanding is vital to land reform objectives and the achievement of social justice, to ensure that our nation's land benefits all who choose to live and work in Scotland. In addition, we are also committed to Community Wealth Building, which seeks to ensure that economic benefits from all investment activity are shared at a local level.

Transparency improvements in recent years

In 2014, the Land Reform Review Group recommended that it should be 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. The Scottish Government consulted on this proposal, however, it was not included in the Land Reform (Scotland) Act 2016 because the proposal was found to not be capable of delivering the desired transparency.

As an alternative, the Scottish Government, in conjunction with Registers of Scotland, has taken forward the development of the Register of Persons Holding a Controlled Interest in Land. In addition, the UK Government (UKG) brought forward emergency legislation in response to the invasion of Ukraine to bring forward a Register of Overseas Entities.

Improving transparency to respond to contemporary challenges

Despite the legislative improvements to the transparency of land ownership in Scotland, and indeed the ongoing work of the Registers of Scotland to complete the Land Register of Scotland, the Scottish Government considers that the increased inward investment in our land and natural capital, coupled with the heightened public interest in the transparency of companies, legal entities and land ownership as a result of the invasion of Ukraine, merits a reconsideration of the issues associated with restricting the acquisition of land in Scotland.

Transparency of land ownership is critical to land reform objectives. It is not the transparency alone that is critical, so too is ensuring that wealth generated in Scotland benefits those that chose to live and work here. That is why we consider that we should explore again the issue of who should be able to acquire large-scale landholdings in Scotland. This matter was considered in some depth during deliberations on land reform measures in 2015. The context for this discussion has however changed significantly following the UK's exit from the EU, and we would now need to consider a slightly different option.

Instead of restricting ownership to only legal entities registered in a Member State of the European Union, we would like to explore the potential introduction of a requirement that those seeking to acquire large-scale landholdings in Scotland need to be registered in an EU member state OR in the UK for tax purposes. We consider that this requirement could help deal with instances of absenteeism, and help to ensure social justice and that income generated by the ownership of Scotland's land and buildings is not extrapolated by wealthy individuals to the detriment of local communities.

The current devolved settlement may limit our ability to take this proposal forward, and there are a number of complex legal issues to consider. We are seeking engagement with the UKG to press them to introduce a similar requirement on a pan-UK basis, however, we will consider doing all we can within the confines of the current devolved settlement following the responses to this consultation.

Questions

Q41. Do you agree or disagree with our proposal to explore:

• Who should be able to acquire large-scale landholdings in Scotland

Agree / Disagree / Don't know

• The possibility of introducing a requirement that those seeking to acquire large-scale landholdings in Scotland need to be registered in an EU member state or in the UK for tax purposes

Agree / Disagree / Don't know

Please give some reasons for your answers: