The Land Registration etc. (Scotland) Bill is currently being considered by the Scottish Parliament. One topic I have raised is the question of beneficial landownership and land held by companies in tax havens (see previous posts on topic).The Scottish Government has made clear (cols 982-985 in Fergus Ewing’s evidence of 8 February 2012) that it is not inclined to entertain any prohibition or controls on ownership by tax havens. In the Stage 1 report of the Economy, Energy and Tourism Committee, MSPs concludes (para 219) that
219. We consider that the Scottish Government should reflect further on options for ensuring that the land registration system reduces the scope for tax evasion, tax avoidance and the use of tax havens, and that the Government should explain prior to Stage 2 what additional provisions can be included, whether in the Bill or otherwise, to achieve this objective.
The Scottish Government’s response to the Stage 1 report was published on 25 April. In response to the above, it responded that,
“The Government has reflected on the Committee’s comments. While recognising the concerns in this area, it considers that any proposal surrounding transparency of ownership of land by companies would be difficult to develop, as there is no clear concept of beneficial ownership in Scots law. There are also issues of company law that would be reserved to the UK Parliament under the terms of the Scotland Act.
The Bill provides for the completion of the Land Register. A completed Land Register is the best way to ensure that it is possible to find out who owns particular pieces of land.”
In light of this, I was intrigued to note a question by Stewart Stevenson MSP (now a Minister in the Scottish Government) at First Minister’s questions on 9 October 2003 following an expose of tax avoidance by Scottish landowners in the Sunday Herald the previous weekend.
4. Stewart Stevenson (Banff and Buchan) (SNP): To ask the First Minister what plans the Scottish Executive has to establish a publicly accessible and complete register showing land ownership in Scotland. (S2F-268)
The First Minister (Mr Jack McConnell):
Scotland has had a publicly accessible register of land ownership since 1617, which is being replaced by a fully computerised and plan-based land register of Scotland. Land registration is organised by reference to the old counties of Scotland and the new land register has been operational in all those counties since April this year. Registration first takes place when ownership is transferred.
Stewart Stevenson: Is it smart that our current land register conceals beneficial ownership of a huge part of our land? Is it successful to allow that concealment to be used to avoid effective tax collection? Should Scotland’s people be able to find accountable owners when they need to? Smart, successful Scotland requires transparent land ownership.
The First Minister: Stewart Stevenson raises two issues. One is about having a complete land register, towards which we are working. The register is added to when land is sold or transferred. In time, that will be a good asset for Scotland.
The second issue is beneficial ownership of land, which the land reform policy group has raised. In the previous parliamentary session, the Executive researched the subject and found that a strong case could not be made for implementing the changes that Mr Stevenson advocates. However, we will keep the matter open for consideration; I am sure that the matter will be discussed in Parliament over a long period.
(Scottish Parliament Official Report 9 October 2003 Column 2540-2541)
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