Appendix 1: Policy factors (1900-1980) and policy timeline (1900-2014) affecting Scottish land ownership
Policy Factors 
Pre-First World War
Following repeal of the Corn Laws and the "Golden Age" of agriculture in the mid-19 th century, agricultural depression prompted government efforts to strengthen farm tenants' rights but also to make it easier for ownership to change by simplifying the legal processes for selling land (thereby greatly reducing legal costs) and relaxing the obligations to maintain existing family ownership of land. In addition, taxation of land ownership was increased before and after the turn of the century, most notably with the introduction of estate duty payable on an owner's death, a move widely interpreted as prompting the fragmentation of large land holdings and hence changes in ownership. Separately, and echoing the development of state-owned crofting estates  some efforts were made to acquire and equip public smallholdings for rent outwith the Crofting Counties (of Argyll, Caithness, Inverness, Ross & Cromarty, Sutherland, Orkney and Shetland).
The First World War and the 1920s
Reliance on agricultural imports under a laissez faire trade policy left the UK exposed to food shortage risks at the outbreak of the First World War, and led to overt government intervention in agriculture to increase production. This took the form of compulsory expansion and improvement of cultivated areas coupled with guaranteed prices, leading to a surge in agricultural prosperity and land values for the first time in several decades. Many landowners sought to realise sudden capital gains, with a reduced agricultural rate of Estate Duty and capped rent rises providing further motivation to sell land. Tenants wishing to continue farming in situ were often faced with no choice other than to purchase farmland when their landlord sold, with changes to the tax assessment of tenants' income also favouring a switch to owner-occupation: this marks the beginning of the shift away from a predominantly tenant farming which has continued to the present day (Thomson et al., 2014).
The abrupt abandonment of guaranteed prices (the "great betrayal") via the Corn Production (Repeal) Act of 1921 ushered in another prolonged agricultural depression and an enduring distrust of government amongst landowners and farmers. Tenants' rights were further strengthened, exemption (initially partial, and then complete) was granted from paying business rates, and product Marketing Boards (e.g. for milk) were introduced, but agriculture remained depressed until the onset of World War Two.
Separately, explicit support for farmland ownership rather than renting was provided in the form of favourable credit for the improvement and purchase of agricultural land, although the Board of Agriculture also used Treasury funding to expand pre-war actions to directly purchase and equip smallholdings to rent to (particularly) returning servicemen through the Land Settlement (Scotland) Act 1919. State-ownership of land was extended more significantly through creation of the Forestry Commission in 1919 (with some land used to create smallholdings, later more often just housing, for rent).
The Second World War and the Immediate Post-War Years
War-time intervention in agriculture was again a combination of direct control by government together with a range of guaranteed prices, livestock headage payments and capital grants (e.g. for land conversion to arable, fertiliser applications and drainage) intended to increase production. These measures were subsequently enshrined in the 1947 Agriculture Act, and, although there was some evolution of specific measures, essentially defined British agricultural policy until the 1970s.
As agricultural prosperity rose, so did land values - prompting some landowners to realise capital gains and (despite some regulatory controls on land speculation) some external investors to move into farmland as an asset class. The latter were also encouraged by depressed real returns on other assets (e.g. equities and gilts) plus generous tax allowances for maintenance costs and capital expenditure as well as tax-free capital gains on land improvement. Tenants' rights and freedoms were again strengthened, notably in terms of rent reviews and security of tenure - both of which contributed to the emergence of the vacant possession premium  and helped sitting-tenants to buy farms with credit secured against an asset that would immediately gain in capital value, further reinforcing the decline in tenanted land.
Separately, the 1947 Town and Country Planning (Scotland) Act established the foundation of modern land use planning policy, breaking with the previous tradition of ownership alone effectively determining development rights (earlier attempts at development zoning had been little used since local authorities were required to compensate landowners for constraints). A Development Gains Tax was introduced on windfall gains arising from the granting of planning permission, but various tax reliefs were available in relation to farmland. The National Parks and Access to the Countryside Act 1949 introduced powers to acquire and manage public land to create National Nature Reserves ( NNRs), to be exercised by the Countryside Commission for Scotland (later the Nature Conservancy Council Scotland and then Scottish Natural Heritage).
The 1950s, 1960s and 1970s
The lower agricultural rate of Estate Duty introduced after World War I was confirmed in 1949 at 45% of the normal rate. This resulted in capital switching from other assets into farmland, a trend reinforced in the 1960s by changes to the obligations on investment trustees regarding their ownership of different asset classes, leading to increased interest in land ownership by a range of financial institutions. Capital Gains Tax was introduced in the 1960s, partly with the intention of capturing an element of land speculation windfalls. However, a number of reliefs were available in relation to land, including roll-over relief which can inflate land values by recycling development gains back into farmland. Primogeniture was abolished as the basis for inheritance in 1964.
UK accession to the European Community and adoption of the Common Agricultural Policy ( CAP) in 1973 coincided with high rates of inflation, volatile global markets for agricultural commodities, an oil crisis, and poor returns on other asset classes. Agriculture initially prospered, and land values rose sharply as individuals and institutions sought to acquire land. But in 1974 the boom ended abruptly, and land prices fell rapidly as (particularly) institutions divested themselves of recently acquired farmland, much of it tenanted. Yet demand for farmland recovered and by the end of the decade land values reached boom levels again.
Perceived loopholes in and widespread (legal) avoidance of Estate Duty prompted its replacement with a Capital Transfer Tax in the mid-1970s, initially including abandonment of agricultural reliefs. Ultimately however these reliefs were retained, albeit confined to "active farmers" in the form of Agricultural (and Business) Relief and thus not available to landlords (unlike Estate Duty reliefs). This change contributed to landlords seeking to take land in hand or otherwise to qualify as active farmers through (e.g.) partnership arrangements with tenants. In addition, echoing the earlier Development Gains Tax, a Development Land Tax was introduced in 1976 specifically to capture a share of windfall gains from non-agricultural developments on former farmland. This was levied at 60%-80% and attracted no roll-over relief.
Separately, the policy of encouraging local government to acquire and equip land for smallholdings had quietly petered out by the 1950s (In England, it had effectively ended before 1930), partly due to pressure on funding but also recognition that the trend of rising farm size  was rendering small holdings uneconomic and was leading to wide-spread absenteeism of tenants (often family successors of the original tenants). In the 1970s, smallholder tenants on public land (including Forestry Commission land) were given the right-to-buy at a discount relative to the market value. Many took up this opportunity, but subsequently sold on again - thereby shifting ownership from public to private hands unrelated to previous tenants.
Policy influences in the 1980s and 1990s
At the start of the 1980s the Capital Transfer Tax, was extended to agricultural landlords, but was subsequently abolished in the mid-1980s, to be replaced by Inheritance Tax - effectively recreating the earlier Estate Duty and its options for (legal) avoidance via tax planning. Development Gains Tax was abolished in the mid-1980s, with farmland sales once again subject to (lower) Capital Gains Tax with various reliefs. However, food surpluses (e.g. "butter mountains") and budgetary pressures were forcing a shift in the way the Common Agricultural Policy ( CAP) operated, causing uncertainty during the 1980s over how guaranteed prices would be set and how production quotas would operate. This led to expectations of lower returns to farming plus lower rates of capital gains, and demand for farmland eased as investment interests turned elsewhere (including more favourably taxed forestry, although scope for gaining advantage by switching between tax schedules was removed in 1988). The existing exemption from business rates for agricultural land was extended to sporting estates in the mid-1990s.
An urban property boom in the late 1980s maintained farmland prices for small holdings, particularly in accessible areas. Similarly, roll-over relief from development sales underpinned land markets in some areas. However, farmland values dipped again in the 1990s as the economy moved into recession, the property boom ended, and the nature of CAP support began to change significantly. Ownership and management of NNRs was extended to "approved bodies" - Non-Governmental Organisations such as the National Trust for Scotland and Royal Society for the Protection of Birds Scotland - acting under concordats with Scottish Natural Heritage ( SNH) and agri-environmental measures, such as Environmentally Sensitive Areas, became more commonplace.
Policy influences since 2000
Since 2000, the CAP evolved radically, with a series of successive reforms (the latest in 2014) marking a switch away from "coupled" payments linked to output production towards (Pillar I) "decoupled" payments linked only to land area but subject to various land management compliance requirements. This switch was accompanied by (Pillar II) grants to support a range of rural development policy objectives, including agricultural modernisation but also agri-environmental improvements and rural community development. At the same time, other regulatory constraints emerged in relation to the environment, for example under the Nitrates and Water Framework Directives but also in relation to, for example, landowners' health and safety obligations and public liability responsibilities. Consequently, farming has had to adjust to a range of different (multi-functional) societal demands for non-market goods and services at the same time as becoming more market-orientated in terms of commodity production. Unsurprisingly, many farms are under financial pressure, and more structural change is anticipated.
However, at the present time, demand for farmland and sporting estates remains high, and values are at record levels, reflecting both an eagerness amongst existing farmers to expand as-and-when neighbouring land becomes available, and external interests seeking tax-efficient and/or lifestyle investments. The financial crash of 2008 led to some land sales (e.g. of the Co-operative Group farms), but persistently low interest rates and low economic growth have maintained demand for land. Given the relatively slow turnover of farmland and the levels of profitability of agriculture, capital inflows from other sectors are more than sufficient to maintain high land values despite low agricultural returns. UK government plans to sell off large amounts of Forestry Commission land were aborted in 2010 in the face of public opposition, but promotion of renewable energy (particularly on-shore windfarms, and also small-scale hydroelectric schemes through the Renewable Obligation and the Feed-In Tariff) has introduced another policy dimension into rural land ownership issues.
- Agricultural Holdings (Scotland) Act 1883 - introduced principles of security of tenure and tenants' rights to compensation for improvements made or damage incurred.
- Finance Act 1894 - introduced Estate Duty, with sliding scale levying higher rates on greater wealth.
- Finance Act 1907 - introduced differential treatment of earned and unearned income, including a surtax on farm rental income.
- Small Landowners (Scotland) Act 1911 - facilitated the creation and equipping of smallholdings by the (new) Board of Agriculture on both public and private land (mirroring earlier Crofting legislation, but also 1907 legislation in England).
- Defence of the Realm Act 1916 - gave Government powers to prescribe agricultural use of private land
- Small Holding Colonies Acts 1916 - strengthened ambitions to create and equip smallholdings, primarily for returning military servicemen.
- Corn Production Act 1917 - introduced guaranteed prices (via deficiency payments) for some arable crops but also prevented landlords increasing rents (plus, although not in Scotland, first introduced agricultural wages boards to set minimum wages).
- Corn Production (Amendment) Act 1918 - reaffirmed Government powers previously established under the Defence of the Realm Act for directing agricultural use of private land.
- Small Holding Colonies (Amendment) Act 1918 - increased the hectarage to be acquired for purposes of the Act.
- Income Tax Act 1918 - increased farm tenants' liability for income tax from previous 1/3 of annual rent to twice annual rent.
- Finance Act 1919 - introduced lower Estate Duty rates for agricultural land.
- Forestry Act 1919 - created the Forestry Commission.
- Land Settlement (Scotland) Act 1919 - strengthened compulsory purchase powers to promote aims of the Small Holding Colonies Acts 1916 and 1918
- Agriculture Act 1920 - modified price guarantees under the Corn Production Act, with a four-year period of notice required if they were to end (also continued Government powers of prescribing agricultural land use).
- Corn Production Acts (Repeal) Act 1921 - notwithstanding the supposed four-year period of notice required, abolished price guarantees with immediate effect although limited one-off compensation payments were made to farmers; ended Government prescriptions of agricultural land use (also abolished the wages boards).
- Agricultural Holdings (Scotland) Act 1923 - further strengthened tenants' rights with respect to compensation for improvements made or damage incurred plus set-out dispute resolution procedures; made tenants' bequeathing of leases possible (subject to landlord agreement).
- The Agricultural Credit Act of 1923 - introduced credit co-operatives to help finance the purchase and/or improvement of farmland
- Finance Act 1925 - introduced higher Estate Duty rates.
- The Rating and Valuation (Apportionment) Act 1928 -established basis for ratings reliefs, including for agriculture.
- Agriculture Credits (Scotland) Act 1929 - established basis for an Agricultural Securities Corporation to provide soft loans to purchase and/or improve farmland.
- Small Landholders and Agricultural Holdings (Scotland) Act 1931 - amendments to previous smallholder legislation.
- Emergency Powers (Defence) Act 1939 - introduced Defence Regulations, including Government direction of production on private agricultural land and protection for farm tenants against eviction
- Income Tax Act 1945 - introduced reliefs for maintenance of farmhouses and cottages
- Town and Country Planning Act 1947 - removed owner's automatic right to develop land and introduced a Development Gains Tax on planning gain/betterment value.
- Agriculture Act 1947 - established basis for guaranteed prices (via deficiency payments), headage payments, capital grants, advisory services and research and development funding.
- Agriculture (Scotland) Act 1948 - further strengthened tenants' rights, clarified principles of good husbandry, amended Government powers to acquire/equip land and to offer soft loans.
- Agricultural Holdings (Scotland) Act 1949 - consolidated parts of the Agricultural Holdings (Scotland) Act 1923, the Small Landholders and Agricultural Holdings (Scotland) Act 1931 and the Agriculture (Scotland) Act 1948; remained basis for tenancies until 1991, including principles of succession and security of tenure.
- Finance Act 1949 - formalised Estate Duty for agricultural land at 45% of normal rate
- National Parks and Access to the Countryside Act 1949 - introduced powers for public acquisition and management of land to create National Nature Reserves.
- Valuation and Rating (Scotland) Act 1956 - formally removed agricultural land from the valuation roll
- Land Drainage (Scotland) Act 1958 - introduced subsidised drainage of farmland
- Trustee Investments Act 1961 - altered obligations on trustee in relation to choosing and acquiring different types of assets
- Finance Act 1962 - introduced Capital Gains Tax
- Succession (Scotland) Act 1964 - removed primogeniture as basis for inheritance.
- The Countryside (Scotland) Act 1967 - gave Countryside Commission for Scotland powers to acquire land
- 1970s Forestry Commission policy of selling smallholdings and housing to tenants or incomers.
- 1970s Department of Agriculture and Fisheries, Scotland policy of selling smallholdings to tenants.
- 1973 UK accession to European Economic Community - switch of agricultural support from deficiency payments to intervention buying and tariff barriers.
- Nature Conservancy Council Act 1973 - gave Nature Conservancy Council power to hold land
- Finance Act 1975 - replaced Estate Duty with Capital Transfer Tax, favouring "active" farmers rather than landlords.
- 1975/6 Less Favoured Areas under CAP - defined disadvantaged land eligible for livestock headage payments.
- Wildlife and Countryside Act 1981 - established "approved bodies" for holding NNRs
- Agriculture Act 1986 - introduced Environmentally Sensitive Areas
- Finance Act 1986 - replaced Capital Transfer Tax with Inheritance Tax, maintaining/reviving various agricultural reliefs.
- Local Government Finance Act 1988 - reaffirmed agricultural exemptions from business rates
- Finance Act 1988 - removed scope for switching schedules to avid tax on planting trees
- Agricultural Holdings (Scotland) Act 1991 - introduced new, shorter duration tenancies plus pre-emptive right to buy for some tenants.
- Natural Heritage (Scotland) Act 1991 - compulsory purchase powers granted to SNH
- 1992 MacSharry reform of CAP - reduction in guaranteed prices offset by introduction of direct payments (e.g. headage premia, with associated quotas) plus "accompanying measures" e.g. agri-environment schemes (although UK Environmentally Sensitive Areas and management agreements on designated sites pre-dated this).
- Local Government (Scotland) Act 1994 - removed sporting estates from the valuation roll.
- 2000 Agenda 2000 reforms of the CAP - formalisation of Pillar I and Pillar II structure of funding.
- 2003 Fischler reforms of CAP - decoupling of Pillar support and strengthening of Pillar II, introduction of cross-compliance.
- Agricultural Holdings (Scotland) Act 2003 - introduced new, shorter duration tenancies, greater freedom to diversify and pre-emptive right to buy for some tenants.
- Land Reform (Scotland) Act 2003 - abolished feudal tenure, introduced Community Right to Buy.
- Nature Conservation (Scotland) Act 2004 - extended land acquisition (by agreement or compulsory purchase) to land of scientific interest, not just NNRs
- The Public Services Reform (Agricultural Holdings) (Scotland) Order 2011 - amended lease duration and timing of conversions under the Agricultural Holdings (Scotland) Act 2003.
- Agricultural Holdings (Amendment) (Scotland) Act 2012 - amended definitions of "near relative" and adjusted processes for rent reviews.
- 2013 CAP reform - obligatory move away from historic basis for decoupled payments, accompanied by splitting of funding between Basic and Green payment (also introduction of "active farming" criteria).
- 2014 Land Reform Review Group report - proposes more radical policy measures, including explicit constraints on landowner nationality and legal form plus limits to scale of ownership.
- Community Empowerment (Scotland Act) 2015 - introduced a new right to buy for communities over neglected and derelict land, providing it is in the interest of achieving sustainable development.
- Land Reform Bill (published June 2015) - setting out provisions for land reform including reintroduction of sporting rates, changes to agricultural holdings legislation, extension of community rights to buy to urban areas, powers to force sale if barrier to sustainable development, creation of a Scottish Land Reform Commission and Tenant Farming Commissioner, encouraging better information and greater transparency on the ownership of land, extension of the Scottish Land Fund, etc.
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