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Register of Controlling Interests

Published: 31 May 2021
Time to read: 4 mins

The Scottish Government implemented a key part of its Land Reform vision when new regulations came into force on 1st April 2021 aimed at improving transparency of who owns and controls land in Scotland.

Section 39 of the Land Reform (Scotland) Act 2016 laid down foundations for the snappily titled, The Land Reform (Scotland) Act 2016 (Register of Persons Holding a Controlled Interest in Land) Regulations 2021, to create a new public register maintained by the Keeper of the Registers of Scotland known as the Register of Controlling Interest in Land. RCI, for short, and not to be confused by the RCIL, the Register of Community Interests in Land.

The aim of the RCI is to fill gaps in the information held on the Land Register of Scotland or the General Register of Sasines where the person or entity registered as the owner of the land is not the person with decision making and ultimate control over what happens on the land. The Scottish Government wants to ensure that for every title to land in Scotland this can be traced back to an individual or individuals.

Of course, for the vast majority of titles to land and property in Scotland where the owner is the occupier there will be no requirement to make an application for registration in the RCI, but it is likely to cause disruption and impact to rural properties where title is often held through a trust or partnership or indeed long leases (those over 20 years) of commercial properties which are also registerable. Overseas companies holding land in Scotland and some unincorporated bodies are also subject to the new regulations. Interestingly, secure agricultural tenancies which are not registerable long leases because they are often less than 20 years in length are not caught by the regulations.

A person with a controlling interest is defined in the 2021 regulations as someone who has an ability to influence or control the dealings of a registered owner of land. Such person is known as an Associate of the person with the registered title known as a Recorded Person. Where applicable, the details of both the Associate and the Recorded Person and the land affected are to be registered in the RCI. It does not matter if, in practice, the Associate does not exercise such control or influence; the ability to do so makes the arrangement registerable.

The Recorded Person has a responsibility to report to the Keeper of the Registers of Scotland their details, the land affected and the details of the Associate. The regulations place an obligation upon the Associate to provide their information to the Recorded Person. The information required for both is the name, address and date of birth. For registerable interests in place on the 1st April 2021 when the regulations came into effect there is a twelve month grace period but for all new arrangements put in place since the commencement the Recorded Person has 60 days to provide the required information to Registers of Scotland.

Failure to provide the information to Registers of Scotland is a criminal offence with the Recorded Person or the Associate liable to a fine of up to £5,000. There are exemptions to the requirement to provide information, principally where it is considered that to do so would put the Associate at risk of harm or indeed if the information is held on another public register, e.g. the People with Significant Control register maintained by Companies House.

The new RCI brings the total number of registers under the control of Registers of Scotland to 20 but it is not only the Keeper who will see an increase in her workload. The requirement to update the RCI every time there is a change to an Associate or Recorded Person or creation of a new notifiable arrangement will mean owners of land and their advisors will need to be alive to the 60 day deadline to update the RCI if a fine is to be avoided.

If you believe the way title to your land may be registerable under the 2021 regulations, please do get in touch.

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