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North of the border
By Kate Davies
Kate Davies predicts that whether they do or don't go, the referendum will cost the Scots a bonnie penny in tax all the same It's over 300 miles from London to the England/Scotland border – that's three times as far away as France where, perhaps coincidently, three times as many of my colleagues have holidayed this summer. Yet it is the independence vote north of the border that Londoners and the rest of the UK will be turning their attention to later this month, rather than to the senate elections across the Channel. But if the Scots do vote for independence on 18 September, will future generations view referendums and elections taking place in Scotland akin to those in France and elsewhere? Personally, I doubt it very much and I believe the two countries will still remain very closely connected, although there are many reported changes that we can expect if the 'yes' vote wins including to the Union Jack.
One prediction from a member of the Flag Institute is that the blue Scottish parts will be removed and replaced with the field of green and white from the Welsh national flag. Wales, incidentally, is not represented on the Union Jack which was designed some 400 years ago because Wales was part of the English kingdom at that time.
Bringing the clocks into
line with Europe with lighter evenings but darker mornings could also come back into play; one of the major reservations to date has been that a change to the clocks in the UK would mean the sun not rising until 10am in the north of Scotland. It is unlikely that an independent Scotland would operate on a different time zone to the rest of the British Isles, in which case, if the rest did adopt the change, Scotland would be likely to follow reluctantly.
There are also some potential unintended consequences of a ‘yes’ vote, including sudden and unexpected inheritance tax (IHT) liabilities for art owners who have previously received exemptions on the condition that their works of art remain in the UK. This condition will no longer be satisfied for art kept in Scotland if it leaves the union.
No vote change
Perhaps, however, the more pertinent question is how much change will there be if there is a ‘no’ vote? This question could be hotly debated over the water cooler, but the answer is noticeable but gradual change. Particularly in relation to taxation, where we have already seen the devolution of some powers away from Westminster to the Scottish parliament, and the Scotland Act 2012 giving the UK government the power to devolve further taxes.
Stamp duty land tax has already been devolved and will be replaced with a Scottish land and buildings transaction tax from 1 April 2015; Scottish MPs are currently asking the public for their opinions on what the new rates and bands will be. An important question as the new tax will be significant for the Scottish property market.
Scottish residency
As for income tax, from 2016 the Scottish parliament will be able to vary the rates set by Westminster by up to 10 per cent, but there are calls for them to be given full income tax powers. Some commentators have suggested that if a lower rate is set, we may see more people basing themselves in Scotland as residents for income tax purposes.
Some, such as Gordon Brown, are suggesting going even further than the full devolution of income and other tax powers by backing federalism in the event of a ‘no’ vote. Federalism would see a series of regional and national assemblies across the UK and a federal government retaining powers over defence and foreign affairs.
Only time will tell what is in store, but one thing that won’t change as a result of the referendum is the British monarchy, which the movement for Scottish independence proposes retaining.
Plus, since the Union Jack was created at the time of the union of the crowns as opposed to at the time of full political union, which happened some 100 years later, there will in fact be no need to change the flag should Scotland vote for independence later this month. SJ
Kate Davies is a solicitor at Wedlake Bell
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