Revealed: Scotland's largest aristocratic landowner holds land in offshore tax haven

CommonSpace, in a unique collaboration with Andy Wightman and The National newspaper , reveals the links between the Duke of Buccleuch and the Cayman Islands tax haven

THE BUCCLEUCH FAMILY, owners of over 240,000 acres of private land, use a shadowy Cayman Islands tax haven firm to control and sell land, it has emerged. The aristocratic estate, run by Richard Scott, the 10th Duke of Buccleuch, confirmed that an offshore ownership group, Pentland Limited, acts as an offshore contact to the family's vast land business empire.

The use of the Cayman islands tax haven, revealed following research by land reform campaigner Andy Wightman, has reignited calls for greater action on the use of complex legal mechanisms used to obscure the ownership of Scotland's land.

Scott, inheritor of the Buccleuch dynasty of 1663, is a director of Pentland, which has a variety of shared financial transactions with firms within the Buccleuch group, where Scott is also a director.

Buccleuch lawyers, Anderson Strathern, confirmed to the Registers of Scotland that one such transaction was the ownership then sale of half a stake in Smeaton Farm (part of Dalkeith Country Park) from Pentland to Buccleuch Estate.

Pentland also owns land near Canonbie, in Dumfries and Galloway and signed loans worth millions of pounds in total to various Buccleuch subsidiary companies.

"Pentland Limited has historically owned land in the UK and currently owns an area of land near Canonbie in Dumfries and Galloway." Buccleuch Estate spokesperson

Wightman, who compiled the research, said: "Transparency is now one of the key issues for a world of global capital in which the wealthiest 1% are not only getting wealthier but are able to conceal their affairs through the use of secrecy jurisdictions.

"Since working on the Sunday Times Rich List twenty years ago and since the advent of the Scottish Parliament in 1999, the UK and Scottish Government's are only now beginning to appreciate the potential scale and impact of secrecy in how land and property is owned.

"What I and others have been campaigning for over the past twenty years is quite simple - full, transparent and accessible information on who really owns Scotland. What we have uncovered today is probably just the tip of the iceberg and it will be a key challenge for the next Scottish Parliament to ensure complete transparency on these matters and ensure that there are no longer any secrets about who owns Scotland."

A spokesperson for the Duke's estate confirmed that Pentland Limited is a Buccleuch venture with interests in Scottish land: "Pentland Limited is a Cayman Islands incorporated vehicle which is wholly owned by The Buccleuch Estates Limited which is UK registered. The company has always been wholly owned by Buccleuch and members of the Buccleuch family, all of whom are UK resident taxpayers.

"All profits arising in Pentland Limited are subject to UK corporation tax. Pentland Limited has historically owned land in the UK and currently owns an area of land near Canonbie in Dumfries and Galloway."

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The Duke, whose five estates cover an acreage larger than any other landowner in the UK, has been a consistent opponent of land reform and has been implicated in numerous community disputes in recent years.

Last week the inherited estate announced plans to block access to Dalkeith park unless walkers and cyclists paid for access. Buccleuch also faced a community backlash in Canonbie over plans for coal bed methane extraction.

Buccleuch, one of the old aristocratic families that grew to dominate rural Scotland through historic land grabs, said he was "deeply dismayed" that the land reform debate had been "re-opened" in the past few years.

"You need to know who owns land to hold them to account and to tax them. That's why completing the land register is vital." Rob Gibson MSP

Convener of the Rural Affairs, Climate Change and Environment (RACCE) committee Rob Gibson MSP, who had led scrutiny of the Land Reform Bill, said the new evidence demonstrates the need to use the Land Reform Bill to ensure future ownership transparency. "This adds to the fact that what the government is proposing is going to expose this kind of thing. What for? You need to know who owns land to hold them to account and to tax them. That's why completing the land register is vital," Gibson said.

Yesterday the RACCE committee published its legacy report for 2011-16, which signalled that land reform efforts will continue through establishing a Land Commission.

Gibson added that "the next committee will have a big job to do" to ensure that land ownership is transparent and any ongoing tax avoidance is identified.

The scale of offshore ownership of land is estimated to equal 750,000 acres of land. As the national land register is uncompleted, Scottish Government officials have been unable to confirm the scale of the tax haven problem.

"The [land reform] movement seems to be getting stronger all the time both within political parties and outwith them." Nicky MacCrimmon

In January chief police investigators warned that complex offshore ownership structures also create a bureaucratic nightmare for enforcing the law, specifically in relation to prosecuting the wildlife crime that took place on the Kildrummy estate. The police found it impossible to identify a legal owner of the land - held offshore in Jersey - despite three years of effort and "significant international investigations".

Nine months of negotiation between MSPs, campaigners and the government aimed to strengthen the bill to ensure the greatest transparency for Scottish land registered in places like Cayman, the British Virgin Isles and Jersey.

On Wednesday the Scottish Parliament will hear amendments to the bill from Patrick Harvie MSP, including proposals to tighten regulation on land owned in British overseas territories.

Nicky MacCrimmon, who led the victory for land reform campaigners at the SNP's 2015 conference, called for the government to end tax haven ownership by rich landowners: "It is not just a question of tax revenue or potential money laundering. It goes to the heart of democracy by saying we demand transparency and accountability from the people who own and exploit our natural resources.

"The [land reform] movement seems to be getting stronger all the time both within political parties and outwith them. It is becoming mainstream to believe in land reform, ordinary people are having conversations in pubs and online forums about land value tax.

"The next big leap for me to take the debate forward will be to really begin to highlight the problems caused by our land use and ownership in urban settings."

"The Scottish Government, meanwhile, can take its own steps to ensure that no land is owned without public record of the ultimate beneficial ownership - regardless of which jurisdiction or structure is used." Tax Justice Network

The greatest opposition to land reform has come from the lobbyists for big landowners and their legal representatives. Legal firm Brodies warned the Scottish Government that land reform action could lead to a court challenge and high compensation claims from landowners.

Socialist coalition Rise has called for Scotland's aristocracy to be confronted through "a campaign of protest".

The ownership of land in Scotland has also caught the attention of tax justice campaigners, who oppose the web of "secrecy jurisdictions" where an estimated $7.6bn of global wealth is stored offshore.

Alex Cobham, director of research with the Tax Justice Network, said: "There's no good reason not to know who you're doing business with, so any time you come across such complex and opaque ownership arrangements, you have to ask what the reason is. The irony here is that it relates to the ownership of the most tangible assets imaginable: the land itself of this country.

"The UK government has played an important role in the fight against anonymous company ownership, but there's a very long way to go - and it starts with addressing the biggest global financial secrecy network, which is of course made up of the UK's own Overseas Territories and Crown Dependencies. When David Cameron hosts his international anti-corruption summit in May, the item at the top of the agenda must be to require every one of these jurisdictions to commit to public registries of the beneficial ownership of companies, trusts and foundations.

"The Scottish Government, meanwhile, can take its own steps to ensure that no land is owned without public record of the ultimate beneficial ownership - regardless of which jurisdiction or structure is used."

Key moments in a movement: The path to the current #LandReformBill debate

The Cayman Islands, where Buccleuch's Pentland Limited firm is based, was condemned by President Barack Obama for undermining global tax rules.

Cayman, a British Overseas Territory, has no direct taxation and is used by many of the world's largest corporations to avoid tax. One Cayman building, Ugland house, is the registered address of nearly 20,000 global firms.

When asked who could shut down the tax avoidance industry on the island, Cayman Premier Alden McLaughlin said: "Ultimately the UK can because they have the overriding responsibility."

Further controversy over business activity in tax havens coincides with the release of a new report from charity Oxfam called 'Ending the era of tax havens'.

Mark Goldring, Oxfam chief executive, said: "Currently, a privileged minority are able to hide billions offshore away from tax authorities, which unfairly increases the burden on the rest - especially people who are already struggling to get by.

"It's time the Government ended the secrecy that allows tax dodgers to get away without paying their fair share, robbing the UK - and poor countries - of vital revenue that could help fund public services and provide a strong safety net for most vulnerable."

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Picture courtesy of Chalky Lives

Comments

Cassandra

Tue, 03/15/2016 - 20:28

I am surprised that this story is a revelation to anybody.I have known about this for years.And they are not the only large landowner to register their property in an off shore tax haven. Why we allow land to be registered this way is beyond. This and other land owners cannot be properly ascertained because the land is registered in the name of a trust and the trustees are not the owners. We should have transparency of ownership but the SNP have shirked away from this idea.

Mark Harper's picture

Mark Harper

Tue, 03/15/2016 - 12:32

Welcome to feudal Scotland, same as it ever was...

EdinburghEdwards's picture

EdinburghEdwards

Tue, 03/15/2016 - 23:06

Think land reform is important? Consider helping Andy Wightman get elected to the Scottish Parliament this May: http://www.crowdfunder.co.uk/elect-andy-wightman

Amanda Baker (not verified)

Tue, 03/15/2016 - 14:47

Clearly the English are happy to let the inbred toffs walk all over them because they're anaesthetised by the Great British Bake-off but why have the Scots not floated these greedy knackers off to their tax havens and pointed Trident at them? Twould solve two problems...

Bill Melvin

Tue, 03/15/2016 - 19:51

Time for Scotland to consider a wealth tax. There is enough money, which has come from the economic activity of the many to fuel the wealthiest to a quite grotesque level, that could easily eradicate the need for austerity. The problem is having a chancellor whose family are entrenched in the system of offshoring profits to avoid tax, being able to control tax collection. All aspects of our undemocratic and corrupt system in the UK are now being exposed and slowly but surely more people are waking up to whats been going on but its still going to take some time to sort.

Robert Pennington (not verified)

Wed, 03/16/2016 - 09:00

I'm really glad this receiving attention. Again. But it's not new and it is the norm, rather than some exception as the headline perhaps implies.

The cottage I rent from another land monopolist is "owned" by a Trust registered in Guernsey, which is presumably where my rent goes.

Gerrard Winstanley (not verified)

Wed, 03/16/2016 - 11:24

Private Eye have been doing some excellent research on this:
http://www.private-eye.co.uk/registry
We need Land Value Tax.
Tax land not work.

CommonSpace journalism is completely free from the influence of advertisers and is only possible with your continued support. Please contribute a monthly amount towards our costs. Build the Scotland you want to live in - support our new media.