The Scottish Government has recently confirmed that it does not intend to legislate to make land in Scotland subject to “legal rights” claims - a decision that is likely to be welcomed by landowners.
At present, the Scots Law of Succession provides certain fixed rights of inheritance that can be claimed by an individual’s spouse, civil partner and children. These are known as their “legal rights” and amount to a fixed proportion of the “net moveable estate” of the deceased. This is an important distinction for landowners: since land (and any buildings on it) is “heritable”, as opposed to “moveable”, land is not subject to these same legal rights claims. Accordingly, a landowner is free to leave their land to anyone they wish.
There had been speculation for some time that this distinction would be removed, as suggested both by the Scottish Law Commission and reports on land reform. This possibility has been a cause for concern among landowners who feared that, if land was subject to legal rights claims, it could lead to holdings being broken up on death, with consequential impact on their longer-term viability.
In its response to the Scottish Law Commission’s Report on Succession, the Scottish Government has confirmed that it will not look to remove the distinction between heritable and moveable property. Land (and buildings) will continue to be excluded from legal rights claims, and landowners will remain free to leave land to whomever they please.
While this is a welcome clarification, there are two important points to bear in mind. First, that this applies only to land held by individuals. Land held through partnerships or companies may still be subject to a legal rights claim, since all partnership assets are treated as moveable property (whether the asset is land, cash in the bank or machinery) and individuals in such a situation may need to undertake further inheritance planning. Secondly, it stresses the importance of having an up-to-date will: there is no benefit in having the freedom to leave land to whomever you wish if you don't take the opportunity to exercise that right.