The Moveable Transactions (Scotland) Act 2023 was passed by the Scottish Parliament on 4 May 2023 and received Royal Assent on 13 June 2023. It is hoped that it will be fully in force in the summer of 2024.

Historically, it has not been straightforward in Scotland to fund income streams – particularly future income streams – or to take security over assets that the owner wants to continue to use in its business.

The aim of the Act is to tackle these issues, help businesses raise finance against their Scottish assets and encourage new players to enter the finance market in Scotland. 

The Act introduces radical changes into Scots law in relation to:

• the transfer of claims (such as the sale and purchase of, or security over, loan books and income streams). There will be a new Register of Assignations that provides an alternative to intimation to debtors and enables, for example, the transfer of, and security over, future income streams and identifiable classes of claims;
• security over IP, shares (either when the Act comes into force or quickly to follow) and assets such as whisky, livestock, plant, equipment and vehicles. There will be a new Register of Statutory Pledges, and it will be possible to take a statutory pledge over items such as these – in the case of physical assets, without having to have possession of them.  Future assets can be pledged as can identifiable classes of assets. 

There are, of course, some protections for debtors who pay the original creditor where they have not had notice of a transfer and for some third parties who acquire pledged assets in good faith.

However, raising cash on invoices will be simpler – customers with strong IP rights will be able to offer a charge over them, avoiding the need for a complicated outright transfer and licence-back arrangement; and customers with high-value assets will be able to offer statutory pledges over them without the creditor having to have possession of the assets.