Delivering best use of land should be central to Scotland’s fiscal policy

Press Release

What Scotland wants to deliver from its land needs to be the key factor when considering a huge and costly exercise to assess and include all land on the valuation roll.

Scottish Land & Estates, the rural business organisation, made the comments following the Scottish Land Commission’s (SLC) publication of Advice to Scottish Ministers on Land Reform and Taxation.

The commission makes five recommendations including exploring the role of taxation from future carbon values and investigating the potential for an income tax relief to support letting of agricultural land.

Sarah-Jane Laing, chief executive of Scottish Land & Estates, said:

“Scotland’s land businesses are instrumental in providing food for domestic and international consumption as well as enhancing our environment and capturing carbon, delivering clean energy and supporting economic and employment opportunities in sectors such as tourism.

“Any amendments to taxation systems have to be thought through with great care. Introducing tax measures in order to promote land reform would run the risk of damaging the substantial benefits rural businesses already create – not to mention the considerable tax and rates that are already paid by these companies.

“Bringing all land onto the valuation roll for non-domestic rates would be a mammoth exercise to complete. Scotland’s farming businesses would be caught up in a mountain of red tape, not to mention the uncertainty it would foster even if there are no plans for rates to be charged at present.

“As we have witnessed from the valuation exercise for deer forests and sporting rates, businesses which government claim will not be subject to rates are inevitably caught in the ratings valuation process, often with significant time and costs attached.

“We continue to be supportive of investigating the potential for income tax relief to support letting of agricultural land and would encourage the Scottish and UK Governments together to consider what may be achievable. Rural businesses want to let land and want to see more new entrants making their way into farming in Scotland.

“We also note that the commission recommends government considers the role of taxation in the productive balance of public and private benefit from future carbon values. With the Scottish Government setting ambitious forestry and peatland restoration targets, much of which is already being delivered through private landowners, it may be counterproductive to introduce taxation changes which could impinge the pursuit of net-zero by 2045. This recommendation may also appear pre-emptive given the Scottish Land Commission only last month engaged researchers to examine the effect of natural capital and carbon value on land sales.”