|Scottish Parliament Criticizes Land Reform Bill’s ‘Weak’ Transparency Provisions|
The Scottish parliamentary committee charged with reviewing the Land Reform Bill is asking for stricter provisions on the transparency of land ownership.
The bill, published in June this year, is mostly aimed at rural land, especially large country estates used for shooting. One of its declared purposes was to give local communities the right to identify the ultimate owner of land, so that they can seek remedies – possibly even seek compulsory purchase – if the landowner is failing to 'engage responsibly' with them.
Some of Scotland's largest estates are owned through trusts or shell companies, so that their beneficial owners are not easy to identify.
However, the bill as drafted omitted some controversial proposals to support the identification of beneficial owners. One of these would have prevented the purchase of Scottish land by companies, trusts or partnerships based outside the European Union. Instead of this, the draft bill gives the Keeper of the Registers powers to request – but not demand – information regarding beneficial ownership.
The Scottish Parliament's Rural Affairs, Climate Change and Environment committee has now reported on the draft bill. Its main conclusion is that the transparency provisions are not effective. 'As presently drafted, Part 3 [of the bill] is unlikely to deliver the improved transparency about those who not only own land, but control or benefit from land, that the Scottish Government is seeking', says the report. 'The provisions in the bill must be enhanced and strengthened if it is to achieve its aims.'
The Committee insists that the Keeper of the Registers must have powers to force – not just ask – landowners to supply information on beneficial owners and 'controlling interests', which will be kept in a central register. Moreover, it says the general public must have full access to this information, rather than restricting it to those affected by the land, as the bill currently has it.
It also recommends that the originally proposed restriction on purchasers of Scottish land should be re-introduced. New buyers would have to be registered EU entities, and current landowners who are not registered in the EU would have to do so within five years. They would also have to provide a named contact point in Scotland, and would be required to 'clearly identify those who will control the land and those who may benefit from that ownership and control', as well as 'any other appropriate information that could reasonably be needed'.
The committee was also uneasy about provisions in the bill 'relating to the lack of detailed supporting information concerning the reintroduction of non-domestic business rates for shootings and deer forests'. It called for extra research to be done on the economic impact of re-introducing business rates for sporting estates.
The opinions expressed do not constitute investment advice and specialist advice should be sought about your specific circumstances.
Published on our website on Dec.8, 2015