Senior Partner, Douglas Connell, talks about the 2014 Scottish Independence Referendum and what it means for you. Watch Douglas Connell's video on the 2014 Scottish Independence Referendum.

We're now getting close, actually very close, to the date of the Scottish Independence Referendum on the 18th of September and what we're increasingly being asked by clients is what we think is the direction of travel for taxation, particularly capital taxation.

We've had, of course, the White Paper, which was a guide, which quite explicitly stated that it was a way of laying out how we can complete Scotland's journey to home rule and become a fully independent country – no equivocation in the purpose of the White Paper. But those of us who, I think, genuinely and perhaps naively thought that the White Paper would answer a lot of questions, have been quite disappointed in its content. Donald Rumsfeld, I suppose, helps us to sum up the position;

"There are a few things we know that we know; there are known unknowns, and that's to say there are things we know we don't know; but there are also unknown unknowns, there are things we don't know we don't know…"

- but what we do know, is that the world beginning the day after the Independence Referendum will be different.

There are, I guess, four possible scenarios: one is a weak 'No' vote; one is a strong 'No' vote; one is a weak 'Yes' vote and another is a strong 'Yes' vote – I'm rather discounting the idea of a 50/50 split. So, let's assume for these purposes that we either have a weak 'Yes' vote or a weak 'No' vote, what's going to happen?

Well, a weak 'Yes' vote will lead inevitably to increased powers for Holyrood, including additional tax raising powers. But, curiously, a weak 'No' vote has a similar result, in that there will inevitably be increased powers for Holyrood and there will also be a wide range of tax-raising powers in some form of Devo Plus or Devo-max. So, if you like, a known known is that we will see, probably from 2016 onwards, whatever the outcome of 18th September, we will see a divergence of fiscal policy between Scotland and the rest of the UK.

What can we then deduce about the likely direction of travel for taxation and, especially, capital taxation, either in an independent Scotland or a in Scotland with Devo-max or Devo Plus? And you would think that an obvious place to start might be the 649 pages of the White Paper, but, you know, the words 'capital taxation' don't appear anywhere in these 649 pages. There's no mention of inheritance tax reliefs or the rate of inheritance tax; there's no mention of the nil rate band for inheritance tax; there's no mention of rates of capital gains tax; there's no mention of a wealth tax, there's no mention of a mansion tax; for those of us involved with cultural heritage, there's no mention of heritage taxation and reliefs. So, we have unknown unknowns in the White Paper.

What about the other political parties? Well, the conservatives at Westminster committed in their 2010 manifesto, before that general election, that there would be an increase in the rate of inheritance tax, in the sense that the nil rate band, currently £325,000, would be increased to £1million per person – a huge change in the structure of taxation on death. But the manifesto was not translated into action because of the coalition agreement. But, speaking at the end of March this year, at the Saga Magazine Conference – sadly, I wasn't able to attend – but at that conference, the Prime Minister said that he would like the conservatives in their manifesto for the 2015 General Election, the Westminster election, to increase the inheritance tax threshold to 1 million pounds per person, and he said that he believed in people being able to pass money down through the generations and pass things on to their children. We also know from Lord Strathclyde's Devolution Commission that the conservatives favour giving Holyrood full income tax powers but not the powers over capital taxations, so they would continue to be reserved to Westminster.

What about the SNP? Well, nothing in the White Paper, and they've issued no policy statement when it comes to taxation, except that they're in favour of lower rates of corporation tax. Capital taxation, so far as I've been able to see, has not been publicly and formally discussed by the SNP.

Labour? Well, the Scottish Labour Devolution Commission, chaired by Sarah Boyack, issued their paper in March of this year, and they would give the Scottish Parliament more tax-raising powers, but nothing was said specifically about capital taxation.

The Lib Dems? Well, Ming Campbell chaired a Lib Dem commission and they said they would like the Scottish Parliament to be responsible for raising the majority of the funds that it spends. They would like the UK to become something of a federal state – new constitution required to achieve that – and, logically, one might think capital taxation would also be devolved. And that would mean, if that were right, that Holyrood would have some measure of control over capital gains tax, and inheritance tax and so on. So, there's a melange of information around, and what advice can Turcan Connell give against that background?

Well, there may be opportunities available now when 100% business property relief or 100% agricultural property relief for inheritance tax may be available and it may be something that won't be available in the future, so gifts could be made into trusts, family trusts, or outright to family members. There may be just a window of opportunity that won't arise in the future and, to be honest, this could be quite a tax-efficient time to die. More broadly, the expectation has to be that what we're going to see is a divergence of fiscal policy between Scotland and the rest of the UK, whether or not Scotland is independent. And it won't be necessary to move to the British Virgin Islands or to Bermuda, a tax haven may be a train ride away. And the question, the unanswered question, is whether that train ride will be from Hampshire to Glasgow, or from Edinburgh to Berwick – we have to wait and see.

This content was generated prior to Turcan Connell Asset Management Limited operating as Tcam.