The Register of Controlled Interests in Land (RCI), part of the Scottish Government’s land reform agenda, will go live on 1st April 2022 and will impact many individuals and entities who own or tenant land in Scotland.
The Land Reform (Scotland) Act 2016 required Scottish Ministers to make regulations for a new public register of controlling interests in landowners and tenants. The resulting Regulations, The Land Reform (Scotland) Act 2016 (Register of Persons Holding a Controlled Interest in Land) Regulations 2021, were passed by the Scottish Parliament on 17 February 2021 and will come into force on 1 April 2022.
The stated purpose of the new Register is to improve transparency about land ownership in Scotland, by making information about those who have a controlling interest in land (i.e. those who ultimately make decisions about the management or use of land, if they are not registered as the owner of the land) publicly available.
Who will maintain the Register?
The Keeper of the Registers of Scotland, who is also responsible for maintaining the Land Register of Scotland and the General Register of Sasines in Scotland, is responsible for establishing and maintaining the RCI.
Who will be affected?
The Regulations will affect owners and tenants of leases longer than 20 years who hold title to land (the “recorded person”), where others exert significant influence or control over that owner.
The recorded person will be required to enter information about those who have significant influence or control (the “associate(s)”) into the RCI.
Examples of where the new duty to register will arise are: –
- Where title to land is held in the name of an individual, but the land is partnership property and the partners include individuals or entities not registered as title holders.
- Where title to land is held in the name of a Trust, but the current Trustees, or any one of them, are not shown in the title deeds. This will affect a potentially large number of older Trusts where the identity of the Trustees has changed since the land was acquired by the Trust.
- Where title to land is held in the name of a Trust, but the land has been appointed (but not yet formally transferred) to a beneficiary of the Trust.
This list is by no means exhaustive and other situations will arise where registration is required. Rural landowners are likely to be most affected by the new Regulations, as it is common for title to rural land to be held on behalf of Partnerships and Trusts in particular.
Are there any exemptions?
The Regulations build in a right to apply for a security declaration where the entry of an associate’s information in the Register could place the associate or someone connected with them in danger.
There are also exemptions to ensure that information which is already publicly available within the UK, such as through the UK persons with significant control register maintained by Companies House, do not need to be duplicated in the RCI. So, for example, UK companies, Scottish Limited Partnerships and Scottish Charitable Incorporated Organisations who own land will not need to provide information to the RCI about who controls those entities. However, if such entities are associates, they will be affected.
What are the relevant timeframes?
There will be a period of 60 days after a person gains a controlled interest for the necessary information to be provided to the RCI.
Where a controlled interest already exists as at 1 April 2022, there is a twelve-month grace period for the necessary information to be provided to the RCI.
What are the consequences of non-compliance?
Failure to comply with the duty to disclose information, or the provision of false or misleading information, will be a criminal offence, with the penalty being a fine of up to £5,000.
There will be no fee charged by Registers of Scotland to make an entry in the RCI or to search the RCI.
What should I do if I am affected?
If you think you will be affected by the new Regulations, please speak with your usual Gillespie Macandrew contact in the first instance.