The Register of Persons Holding a Controlled Interest in Land
The Register of Persons Holding Controlled Interest in Land (the ‘RCI’) went live on 1st April 2022. Unlike the Land Register and the General Register of Sasine, both of which only hold the information on who legally owns the land or property in Scotland, the RCI identifies who controls the decisions of owners or tenants (Leases of more than 20 years). The aim of the Register is to increase public transparency by providing the information of the key decision makers where the details of this may not be available in the Land Register or the Sasine Register.
The Land Reform (Scotland) Act 2016 (Register of Persons Holding a Controlled Interest in Land) Regulations 2021 requires certain persons such as land owners or tenants to register themselves as a ‘recorded person’ and to register their ‘associates’. A recorded person is someone who either owns or tenants land and has an associate. An associate is a person with a controlling interest in the land that can influence decisions about said land.
Who needs to register?
Those who fall within the categories below will need to make an entry in the RCI:
- Trusts and those individuals who either own or tenant land as trustees of a trust and where the Trustees’ names do not all currently appear in the Land Register/Sasine Register
- Partnerships and those who either own or tenant land on their behalf and where the partners’ names do not all currently appear in the Land Register/ Sasine Register
- Those who have a contractual or other arrangement with the owner or the tenant of a long lease which effectively gives them control over the land
- Unincorporated bodies and those who either own or tenant land on their behalf and whose name does not currently appear in the Land Register/ Sasine Register
- Overseas Entities
Examples of those who need to make an entry
Partnerships
Sarah and Michael who are partners of the Smichael partnership hold title to a property as trustees. However, no reference to the partnership is made in the title and at a later stage they have a third partner, Sam join the partnership. Sarah and Michael are both recorded persons and they therefore need to register Sam as an associate in RCI. This is because Sam, as one of the partners will have significant influence over both the business and the property or land owned.
Trusts
Moira and Sandy are the current trustees of the Smoira trust and they are both named owners of property in the Sasine Register. Lachlan, a trustor who is not named in the title deeds, has the right to either appoint or remove trustees. An entry will need to be made in the RCI as Lachlan has significant control over the trust. Moira and Sandy are the recorded persons and therefore they will need to register him as an associate.
If an additional trustee was appointed, he would also need to be registered as an associate as his name would not appear in the Sasine Register.
Unincorporated bodies
Steve, Susan, Barbara, and Jamie are trustees of the Sunnyside sports club association, and they are all named in the Land Register. The committee of the sports club office bearers is responsible for the management of the club. Since the office bearers can make decisions, they have significant control of the club’s property and therefore for the purposes of the RCI are associates. Steve, Susan, Barbara, and Jamie will need to register the office bearers as associates.
Who is exempt?
If you are an owner or a tenant who already complies with other regimes you may not need to make a submission to RCI. Those who fall into the categories below are not required to report to the new register.
- Scottish charitable incorporated organisations
- UK Companies, Limited Liability Partnerships (LLPs), Scottish Limited Partnerships (SLPs), Societas Europaeae (European public limited-liability company), Scottish partnership where all the partners are limited companies and others who already report to PSC regime held by Companies House
- Public authorities that are legally bound to comply with the Freedom of Information (Scotland) Act 2002 including ministers, health boards as well as local authorities
- Parties occupying properties under a liferent where that liferent has been registered in the Land Register/Sasine Register
Based on the Regulations, the recorded person has an obligation to register themselves and their associates and to provide all the necessary information by making an entry to the RCI within 60 days of acquiring interest/control. The rules will apply retrospectively and therefore those who have acquired land or those who have entered a long lease prior to the Regulations coming into force will also be required to register.
Although the RCI opened on 1st April 2022, there is a one-year grace period until 1st April 2023 to allow time to make an accurate entry, following which there will be consequences for non-compliance. Non-compliance with the duties to make an entry in the RCI will result in a criminal offence punishable by a fine of up to £5,000. It has been confirmed that this fine can be imposed on either the recorded persons or their associates.
For more information on how the changes might affect you, please contact your usual Hill & Robb contact or either Peter Moffett (petermoffett@hillandrobb.co.uk) or Emilia McCleary (emiliamccleary@hillandrobb.co.uk
