What you need to know about the Moveable Transactions Act:

The Moveable Transactions (Scotland) Act 2023 (the “Act”) came into effect on 1 April 2024 and changes the way rights can be transferred between individuals (known as assignations) and new security rights over moveable assets and intellectual property (statutory pledges).

Assignations

An assignation is the transfer of rights or claims of one person to another.  The Act updates and clarifies the law in relation to assignations.  A new, searchable register of assignations came into effect from April making it easier to assign rights or claims.  

Statutory Pledge

Before the Act, it was very difficult in Scotland to grant a security (in other words, borrow money) against a moveable asset of value.  The Act introduces a new type of security for this purpose, the statutory pledge.  A statutory pledge can be granted over certain moveable assets such as vehicles, plant and machinery, livestock, whisky, shares and certain intellectual property such as copyright, trademarks, design rights and patents. A register of statutory pledges has also been introduced.

Whilst this is a welcome modernisation to the law, individuals are unable to grant a statutory pledge except in very limited circumstances.  An individual can only grant a statutory pledge if they are acting in the course of their business (for example a sole trader), as a charity trustee or as a member of an unincorporated association.

There are also conditions on the use of the asset as well as the value of certain assets.

 
Whilst statutory pledges are not able to be granted by individuals themselves, those with moveable assets of high value may still be able to obtain security using corporate structures such as those operated by family businesses or Family Investment Companies (FICs). In addition, while individuals as trustees cannot grant statutory pledges, corporate trustees who are sole trustees can.

How will this impact on individuals?

There is no doubt that the introduction of the Act and the changes it brings is a welcome development of Scots law with the biggest impact being seen in commercial arrangements.  However, improvements to assignations and a new type of security will mean some individuals will have more options available to them.  Business owners will have more security options giving greater flexibility and protection for their business

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