Law of the Land: Changes To Land Ownership
Announcing another new register: Register of Overseas Entities
On 1 August 2022, the Register of Overseas Entities (ROE) was launched. The ROE aims to improve transparency where land in the UK is owned by an overseas entity, and the ROE has been fast-tracked following recent events in Ukraine. The ROE is operated by the Registrar of Companies for England & Wales, however it applies to any overseas entity which owns or leases land anywhere in the UK.
Any overseas entity which is the owner or registered tenant of land in Scotland may require to register in the ROE and declare their beneficial owners or managing officers. The initial deadline for registration in the ROE is 31 January 2023. Companies House are taking steps to notify overseas entities who may be affected, with notices being issued based on address data from Registers of Scotland. Registration in the ROE is also required where an overseas entity is a party to a qualifying deed involving land in Scotland, although different rules apply depending on whether the qualifying deed is entered into before or after 31 January 2023. It is worth noting that registration in the ROE may be required in the case of qualifying deeds involving land in Scotland entered into on or after 28 February 2022, even if the overseas entity no longer owns the land in question.
The rules are complex and the ownerships and associated deeds in relation to land in Scotland will need to be reviewed in each case to determine whether or not registration in the ROE is required. Once registered in the ROE, the overseas entity has ongoing obligations to keep the information held on the ROE up to date, even if there are no changes. A failure by the overseas entity to comply with its obligations could result in sanctions, daily fines and not being able to transact with land.
How does ROE impact the obligations of an overseas entity to register in the Scottish Government’s Register of Persons Holding a Controlled Interest in land (RCI)?
Registration by an overseas entity in the ROE does not remove any duty to register in the RCI. The Scottish Government is yet to decide whether any amendment to the RCI regulations is appropriate following the launch of the ROE. In the meantime, overseas entities that are within scope of RCI must register in the RCI irrespective of their registration in the ROE.
The Register of Persons Holding a Controlled Interest in Land – a reminder that the initial grace period expires on 31 March 2023
The Register of Persons Holding a Controlled Interest in Land (RCI) contains details of who exercises (or who has the right to exercise) “significant influence or control” over the owner of registered tenant of land in Scotland. Whether or not an owner or registered tenant has a duty to register in the RCI will depend on the ownership structure, but ownerships involving overseas entities, unincorporated bodies or trust, partnership other or contractual arrangements may be caught. The initial 12 month grace period within which to register before penalties apply expires on 31 March 2023. The regulations require the RCI data to be kept up to date with any ownership changes, and so additional RCI submission in future may be required for some land ownerships.