What you need to know about the Moveable Transactions Act:

The Moveable Transactions (Scotland) Act 2023 (the “Act”) was passed by the Scottish Parliament in May 2023 and will make fundamental, and very positive, changes to the commercial landscape in Scotland.  The Act came into force on 1 April 2025.

The Act makes it easier to take fixed security over moveable property and contractual rights in Scotland.

What is changing?

Previously, the only way to create fixed security over moveable property in Scotland was by way of a pledge. This required physical or symbolic delivery of the asset. The Act creates a new statutory pledge which will enable fixed security to be taken over certain moveable assets. Perfection is by registration in a new Register of Statutory Pledges without the need for delivery.

The previous law relating to security over contractual rights was uncertain and out of date. The Act clarifies key issues: the debtor can be notified of the security electronically; future claims can be assigned; the debtor can perform to the assignor pending an event of default. Registration of the security in the Register of Assignations will be possible as an alternative to notifying the debtor of the security.

How will this impact on asset finance, receivables finance and invoice finance?

We anticipate the new regime will improve the availability of asset finance for Scottish businesses. Unlike floating charges, the new Statutory Pledge will be available to partnerships and sole traders. It will be possible to take fixed security over a class of property, for example a fleet of vehicles. It will address the longstanding source of pain in Scotland regarding how fixed security is taken over whisky! Asset finance lenders will consider whether to change their existing security structures to take advantage of the new regime. It will enable non-specialist lenders to provide finance secured against moveable assets. There is strong potential to improve the availability of asset finance for businesses in Scotland.

Receivables and invoice finance is currently very difficult in Scotland given the need to notify (intimate) security over debts to individual debtors. The option to register the security in the Register of Assignations as an alternative to giving notice (or reliance on trusts) is a very positive development. Other crucial improvements are the certainty that security can be taken over future claims and that the debtor can continue to perform to the assignor pending an event of default. The new Act modernises and clarifies the law. This should make it easier for lenders to provide and businesses operating in Scotland to access receivables and invoice finance.

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