How to make money from the Scottish referendum

Whether it's Yes or No, there will be changes to taxes and land reform — so invest accordingly

2 November 2013

9:00 AM

2 November 2013

9:00 AM

The best time to buy an asset is when no one else can stomach it. Great fortunes are made in uncertainty. The self-made rich aren’t the ones who hung around on the edge of an iffy situation thinking about the possible disasters. They’re the ones who calculated the odds and bought before anyone else was sure of the answers.

So where is there uncertainty in the UK today? Most English people are utterly uninterested in the prospect of Scottish independence — or in Scotland generally. But if they were actually to look up north they’d see pretty serious turmoil. It is less than a year until every resident of Scotland gets to vote on whether they want to live with the devil they know or the devil they don’t. Will they stay part of our 307-year-old union, or vote to go it alone?

This surely makes a big difference to whether you invest in Scotland. After all, the SNP have made it clear that they don’t think much of the rich. There will be wealth taxes, land taxes and higher income taxes. There will be land reform too — politicians have made it clear that one way or another they will transfer power to tenant farmers and weaken the great estates that own swaths of rural Scotland. So you might think, at least until things are a little clearer, that you wouldn’t touch Scotland with a bargepole.

But here’s the thing. The uncertainty people think exists around independence mostly doesn’t. It’s a fair assumption that Scots won’t vote to go it alone (the Grangemouth debacle may have been the nail in the Yes campaign’s coffin) but all the things I mention above are almost inevitable whether they do or they don’t.

The Scotland Act 2012 represented a huge transfer of fiscal power to Holyrood. It devolves stamp duty, land tax and landfill tax as well as allowing the Scottish Parliament to set its own rate of income tax and to borrow more money in its own name from 2015. It also provides powers for new taxes to be created.

HMRC’s website tells us the new Scottish taxes ‘may be higher or lower than or the same as those which apply in the rest of the UK’. Anyone who knows anything about Scottish politics can guess which way things will go — on stamp duty, indicative rates suggest that low-priced houses will pay less and high-priced houses will pay even more than they do already. Then there’s the question of land. It isn’t just the SNP who are interested in ‘land value taxation’ and in spreading land ownership more widely. Scottish Labour’s Johann Lamont seems to like both ideas too.

Scotland is changing anyway, regardless of whether it votes for independence. People think they can’t buy in Scotland because they don’t know what the future holds. But they can make as good a guess about Scotland’s future as anywhere else’s. The information is there.

So you see yourself as a braveheart investor: is there a way to invest in Scotland’s future? I’d avoid areas that are politically contentious or heavily subsidised, including forestry and renewable energy: there’s talk about ‘redistributing’ money received by landowners from wind turbines. As for sporting estates, if you have City bonus cash to burn and Bruce Anderson has persuaded you of the sublime joys of stalking, go ahead and buy one — but do so in the knowledge that what you think of as your land rights could swiftly be eroded.

One obvious alternative route (already much discussed at Edinburgh dinner tables) is to buy the property boltholes Scotland’s well-off might bid up when the new taxes start to bite. Berwick-upon-Tweed in Northumberland is 38 minutes from Edinburgh on a fast train, but crucially just the other side of the border. I’m no fan of the English property market, but the north is less overpriced than the south and here £695,000 will bag you a huge five-bedroom Victorian house with ‘spectacular views over the River Tweed, the ruins of Berwick Castle and the Royal Border Railway Bridge’. Imagine the premium you’ll be able to charge an Edinburgh tax-exile commuter for it in three years’ time. On my last visit to Denmark I found large numbers of people who work in Copenhagen live across the bridge in Sweden, where property taxes are lower. Could Berwick become Edinburgh’s Malmö?

But devolution won’t just mean people leaving town. It will mean arrivals too. Imagine the extra civil servants, think-tankers and lobbyists who will be required to help the Scottish government figure out how to spend its new tax take and manage its borrowings. And which of those hangers-on won’t want to live in a nice Georgian townhouse within walking distance of Holyrood? There will be some empty ones (their former occupants will be in Berwick) but if this government goes the way of most, there’ll surely be more arrivals than departures. Perhaps the capital gains in Edinburgh will be enough to offset the new taxes — it works in Washington, where property constantly hits new highs.

Finally there’s Dundee. Yes, Dundee. You may think of it as a miserable, failing Scottish town — but you might not think that when the new Dundee V&A is up and running. Its design has just won a World Architecture News Award and it will, says that journal, ‘bring reams of tourists to the city’s stunning waterfront, providing many additional jobs and introducing a new cultural venue on the River Tay’. That sounds nice. You can buy two- or three-bedroom flats on the water in Dundee, close to the V&A site, for not much more than £100,000. It doesn’t have much to do with independence, but when the V&A opens in 2015 that is surely going to look like something very rare indeed: a UK property bargain.

Got something to add? Join the discussion and comment below.

Merryn Somerset Webb is editor-in-chief of MoneyWeek.

You might disagree with half of it, but you’ll enjoy reading all of it. Try your first 10 weeks for just $10

Show comments
  • Alex Clark

    “Finally there’s Dundee. Yes, Dundee. You may think of it as a miserable, failing Scottish town — ”

    Just to be factually correct Dundee is not a town, it is a city. A larger city than say Oxford and Cambridge. You are offering financial advice but don’t appear to have done even enough research to differentiate between a city and town.

    Think I would decline your advice as you appear not to have researched it thoroughly.

    Secondly, have you ever been in Dundee? What makes you believe that any of your readers may think of it as miserable and failing? Is it because they read that in the newspapers or do you have any figures?

    • LisaR

      Another bigoted Englishman who thinks we care a damn what he thinks..biggest cowards around,so brave writing this shite behind his computer but I’d like him to be so bigoted in front of hundreds of Scots spewing out this rubbish eh!

      • tastemylogos

        Having visited grandparents in Dundee,, I’m sorry to say but its a shit hole. Some towns just are, its the way it is. Don’t get offended, it’s ridiculous, you sound like you have a chip on your shoulder.

        The people are nice, far nicer than in Edinburgh but thats a different issue.

        But the city? Good grief. A hell hole wth nothing… NOTHING… going for it.

        Deal with it, don’t cry.

        PS the Nats are the most bigoted people out there (BNP and other national socialists groups exempted).

        • LisaR

          I don’t see myself as a Nat, the fact I was a Labour unionist for years and still Lab but in favour of Indy does not make me a Nat. I think in a democratic country its our god given right for the freedom of choice and when tripping out the word Nat like it was something filthy, you seriously need to look at the “BritNats” to know there a world of difference. I don’t think wanting an Independent country is the same as EDL/SDL/BNP/UKIP who are fascists and racists. Scots loving kilts, bagpipes and Saltire flags are hardly in the gutter as BritNats are.

          • tastemylogos

            sigh, you are utterly predictable.

            Not to mention over the top with misplaced anger.

            So you are a nationalist? You’re confusing yourself here. I knew you were, you didnt have to tell me. It is obvious in the tone of your bigoted writings.

            I didnt say being a Nat is filthy. You are overly paranoid. Groups of people have the right to self determination, whether cornish, Scouser or Scotish. What is your point here? I just guessed you were a Nat by your bigotry. A bigotry you seem unaware of, which is unfortunate.

            UKIP are definitely a joke, run by dads army but one thing they are not is in the same group as the BNP. The BNP are national socialist whilst UKIP are Libertarian in their outlook. Different peas of dfferent pods.

            Whats a fascist? you sound stupid quite frankly. Don’t use words without an understanding of what they mean.

            You find it distasteful that somebody has opinions differing from your own? Bigot much? Please think before you bash on your keyboard.

          • Alex Clark

            Tasty, interesting handle. You come across as an extremely angry person just by the tone of your writing.

            Put it this way, unlike Lisa I am from Dundee so was disappointed to see that a so called journalist could disparage my city on basically a whim.

            You see the problem is that the more people spout this rubbish then the more it will be repeated, just like you did in your original post.

            I checked your profile in the hope of understanding a bit more about your beliefs and opinions.

            However I did not have the time or inclination to read the 100’s of posts just in the last month and came to the conclusion that you are just an absolute gobshite with nothing to offer to society.

          • tastemylogos

            Very clever there Alex, but you couldn’t have done a little better than, ‘I know you are, you said you are?

            You cal me angry then end with name calling? the lack of self awareness does tickle.

            Yes my Grandparents live in Barnhill, so I visit often. And as they would agree… their town centre is a hel hole and has unemployment of 24%. Truly sad but rotten. Why take it so personally?

            100s in the last month? try 34.

            Moron. Talk about vacuity.

          • Alex Clark

            Ok It was boring but had to be done. i count 132 posts in the lasts 25 days mostly on the Telegraph.

            I’m a moron LOL. Hearing you spout on Birmingham, almost the same view as Dundee:

            “Having had the misfortune to work there for 3 years I can tell you that it isn’t a ‘nice’ city. It is ugly, run-down and to all intents and purposes, a shit hole.

            The people are nice though, I grant you.”


            As for unemployment in Dundee:

            “The City’s claimant unemployment rate stood at 5.8% in April 2013, this remains unchanged from April 2012”


            Tasty try not to talk such bullshit on websites where you may be held to account, as I said earlier you are a gobshite,

          • tastemylogos

            bit strange to be stalking my posts.

            You count 132? i count 34


            Yes worked in aston for CR Tait. Worked in Newcastle too, Gateshead to be precise and what a brilliant city as is Liverpool.

            Sadly, Birmingham, Dundee and Norwich are just appalling.

            The people are indeed nice. So?

            why are you so angry? It is very strange. You a leftie? tenner says you are. Like Lisa, the odds are in my favour.

            Gobshite? Do you talk like this when not hiding behind your keyboard? In Toxteth you wouldn’t last a minute, old chap.

          • Alex Clark

            Tasty should you not be in bed?

            Anyway your link doesn’t work and anyone who can be bothered just needs to click your name and count for themselves.

            You’ve expressed you opinion about Birmingham, Dundee and Norwich, is there anywhere in the UK you actually like, just curious.

            Why did you lie about unemployment in Dundee or was that just something your granny told you? I’ve just realised your either a child or a grown up with a child’s brain so I’ll leave it at that.

          • tastemylogos

            Count for themselves?

            Indeed, They are all lining up, aren’t they, Alex? Everyone sits there counting peoples’ posts. brilliant.

            I’m a child? youve just sat there, in your little room miscounting, 1 by 1, the number of posts I have made, then you hurled an insult at a complete stranger. What is that about? Maybe you are just bing ironic, in which case, well done.

            I;ve just tod you. Liverpool, Newcastle, Manchester are great places to live. You ok with this? Your town is a shit hole, though. Sorry.

            As I say. You are a cliche, my friend. Think about it.

          • replyer to numpties

            Not another tenner, haven’t you learned your lesson?

          • tastemylogos

            another nat in denial.

            you will find both were on the left as was made so transparent by their aggression.

            i’m up 20 quid here.

            both of them are cliches of the left.

            what is it with national socialism that makes you so aggressive?

          • tastemylogos

            Oh my days.

            After a quick glance at your sign ups… call me a gob shite all you like, it ultimately means nothing.

            You on the other hand, you are a ‘cliche’. Far more pertinent an insult.

            1) The lefty: Utterly incapable of self awareness (‘You are very angry’… later on, ‘you gob shite’/words to the affect of ‘you spend too much time here’… before, ‘ive counted your posts’)

            2) unnecessarily angry with a penchant for random, vacuous insults at people they don’t know.

            I thought you were a socialist after 1 paragraph, and it turns out as true. You can not pigeon hole anything as easily as a socialist.


          • tastemylogos

            reading 3 posts… You are indeed a parody. ha. Cheers alex

          • tastemylogos

            I add nothing to society other than the thousands a year in a 40% tax band that pays for you lot up north to stay unemployed. A bit more gratitude please.

      • allymax bruce

        Lisa, don’t be shy, tell Merryn what you really think!
        But, yes, Merryn has that all-to-familiar affliction; like all journalists, they think they know everything, without researching it!

  • I have been to Dundee several times. It is not what you say it is.

    It has, for instance, a decent bio-tech sector and a games industry.

    Your wealth is not paying a bean to Scotland, we pay for ourselves. You, sir, don’t know what you are talking about.

  • allymax bruce

    Correct me if I’m wrong, Merryn, but in your second para’, you say “every resident of Scotland gets to vote”; is that true? I mean, under 16’s, prisoners, the dead!
    Merryn, it seems to me, you must be reading from a Labour party script sheet!

  • Suriani

    If Scotland is of no interest to the the English why all the fuss about keeping Scotland British? May well have something to do with the fact that the rUK will have lost international prestige. A Chatham House document spells out the likely consequences. Go on sleeping old lion but very soon you will be waking to your worst fears realised, the Scots have gone and done it: RIP UK. Property! le véritable vice anglais.

  • BlueCrashDive

    I see the Nats have invited all their pals here…. They always hunt in groups, just look at the Herald and Scotsman comments to see how they swamp message boards in but still the polls show they are a minority and reducing still in numbers….

  • BlueCrashDive

    Of course this article is right about the vote, there is no way the referendum will go the indies way… The rest will interest a minority of readers….

  • yoyoegg

    ‘Sheds with beds’ are one-way bet as Salmond’s SNP is desperate to flood Scotland with immigrants to create a client state of voters