May 2011 witnesses the elections to the Scottish Parliament which will see the politicians finalising their policies. However according to Rog Wood of the Herald Scotland newspaper, they should take into consideration Scottish land reform. This is a policy which he believes has diminished under the SNP.
In 2003 land reform was very important to the Scottish Parliament which resulted in the ground breaking Land Reform (Scotland) Act and the Agricultural Holdings (Scotland) Act. These Acts both did a great deal but there is a lot still to be done.
Scottish agriculture is suffering because of how expensive land has now become. This in turn is putting unbelievable pressure on farm rents. The problem has developed through the tax system for Scottish land. Both agricultural and forestry land are both exempt from inheritance tax, it is thought that they are worth £20 billion combined, although this is not an final figure. Either way it is an astonishing amount. Add to this the fact that the price of land has doubled in the last ten years, all without being taxed, and it is hardly surprising that land values have increased.
However to avoid paying inheritance tax does mean that the land has to be farmed by the owner, rented land is not included. It has been noted that landowners take farms when tenancies expire just for this reason. As a result there are fewer tenancies available on the open market. This in turn leads to farm rents increasing and also to disagreements between landlords and tenants. Anyone interested in entering the farming profession often finds it unaffordable due to land values, if in fact they can find any farm to rent in the first place.
Many feel that the answer to the problem is to tax land when the owner dies. This would result in land values decreasing as more land would become available on the open market. The Government would also benefit from this. However it would have to be considered carefully by those in Government as the flip side would be breaking up farms which might make them uneconomical. Some have suggested allowing the first £1 million exempt from tax, this is seen as the average value for a typical working farm.
At the moment land is also bequeathed to only one child, which is known as primogeniture. It is not, which would seem fairer, divided amongst all the siblings. Therefore Scottish landowners are rather small in numbers but they own a vast amount of the land, land which they can see going up massively in value but that they do not have to pay tax on.