Background
The Register of Persons Holding a Controlled Interest in Land ("RCI") went live on 1 April 2022. It is held and maintained by the Registers of Scotland. The purpose of the RCI is to improve transparency in land ownership in Scotland. It is intended to disclose information about who controls and influences what owners, and tenants of recorded or registered leases of over 20 years, do with their land in Scotland, which is not available from the title information or other transparency registers, available for all to access. Whilst the RCI came into force on 1 April 2022 there is a grace period until 31 March 2024 during which time no offence is committed for any failure to register. After 31 March 2024 any failure to register where required is a criminal offence and may result in fines of up to £5,000. Owners/tenants can register in the RCI directly, or instruct their solicitor/agent to do so for them.
Who needs to register?
We discussed registration requirements in a previous insight, but to recap, the relevant regulations are The Land Reform (Scotland) Act 2016 (Register of Persons Holding a Controlled Interest in Land) Regulations 2021 (legislation.gov.uk) ("the Regulations") which provide that such an owner or tenant in Scotland must provide details for registration of any party who has significant influence or control over the owners or tenants dealings with the land. Such a party is termed an "Associate". However owners and tenants subject to other specified transparency regimes, such as UK Companies and public authorities, are exempt from registration. The result is that registration may be required where the owner or tenant falls into one of the following categories:
- Overseas entities;
- Individuals who are subject to contracts or other arrangements;
- Partnerships and persons who own or tenant land on their behalf;
- Trusts and trustees of a trust; and
- Unincorporated associations and parties who own or tenant land on their behalf.
Identifying whether someone has significant influence or control will vary, dependent on which category of owner/tenant they fall into above. The Regulations set these out in detail at Schedule 1 but to give some examples:
- Overseas entities – a person or entity who directly or indirectly holds more than 25% of the voting rights in the registered or recorded owner or tenant will be an Associate
- Individuals – where an individual holds title to property as a nominee for another person, that other person will be an Associate;
- Trusts – any trustee who is not registered as the owner/tenant will be an Associate, as will any party not named on the title who has the right to appoint or remove a trustee, or right to direct the distribution of assets or the right to amend the trustee; and
- Partnerships – any general partner who is not registered as the owner/tenant will be an Associate, as will any other party not named on the title who is able to influence the decision-making of the partnership without holding a formal governance position within it; and
- Unincorporated associations – a person or entity who is responsible for the general control and management of the administration of the body but is not registered as an owner or tenant of the land will be an Associate. A person or entity is responsible for the general control and management of the administration of a body if they hold an office or other position in that regard.
What information is required?
The owner or tenant must provide certain prescribed information upon registration including:
- Their name, address, any registered number and the capacity in which they hold the property;
- The title number of the land or a description sufficient for it to be identified (each submission to the RCI being made on a "per title" basis);
- The Associate's name, address, any registered number and date of birth (if the Associate is an individual) and the date when their association with the owner/tenant began.
Prior to registration the owner/tenant must verify the accuracy of the Associate's details with the Associate. Where the Associate is an individual and at risk of violence or abuse, or intimidation, they may submit a security declaration to the Registers of Scotland requesting that their details are not publicly published in the RCI.
Timescales
The Regulations are effectively retrospective, so all existing controlled interests must be registered in the RCI by the expiry of the grace period on 31 March 2024 (the grace period was originally due to expire on 31 March 2023, but the Scottish Parliament extended this to 31 March 2024). After 31 March 2024 any new controlled interests must be registered in the RCI within 60 days of the Association beginning. Any changes in the information provided about the owner/tenant, Associate or controlled interest must also be submitted to the RCI within 60 days of the change. Failure to comply with these obligations is a criminal offence and may result in fines of up to £5,000.
With a month to go until the expiry of the grace period, those affected by the RCI must ensure that they are fully aware of the requirements of the Regulations, and make all necessary registrations before 1 April 2024 to avoid penalties.
Disclaimer
This insight is for general information purposes only and does not constitute legal or other professional advice. The content should not be used or relied on, or treated, as a substitute for specific advice of any nature relevant to specific circumstances.
