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Overview —

This paper explores the historical precedents covering how debts and assets are split when states dissolve or become independent and applies those models to the case of Scottish independence.

In particular, the paper rejects the 2014 independence campaign's "subtractive" approach whereby Scotland adopts a "share" of the UK's liabilities less the value of an assets withheld by the remaining UK in favour of a "zero option" approach whereby the rUK is allowed to maintain its claim as the continuing state to the former UK and to adopt all mobile assets and liabilities. In such a case, Scotland may choose to "mortgage" the value of a proportion of UK debt against any mobile assets it successfully negotiates from the UK.

Credits —

Dr Craig Dalzell

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This paper explores the historical precedents covering how debts and assets are split when states dissolve or become independent and applies those models to the case of Scottish independence.

In particular, the paper rejects the 2014 independence campaign's "subtractive" approach whereby Scotland adopts a "share" of the UK's liabilities less the value of an assets withheld by the remaining UK in favour of a "zero option" approach whereby the rUK is allowed to maintain its claim as the continuing state to the former UK and to adopt all mobile assets and liabilities. In such a case, Scotland may choose to "mortgage" the value of a proportion of UK debt against any mobile assets it successfully negotiates from the UK.