On 1 April 2022, a new register called the Register of Persons Holding a Controlled Interest in Land (“RCI”) will become available.
The RCI is being put in place as part of the Scottish Government’s policy to increase transparency of land ownership. It will be free to use and available to the public.
The RCI will contain details of who exercises (or who has the right to exercise) “significant influence or control” over the owner or registered tenant of land in Scotland. An “owner or registered tenant” is the party who is named as the owner or tenant of the land in question in the Land Register of Scotland or in the Sasine Register.
It is the owner or registered tenant’s duty to provide the information to the RCI. If an owner or registered tenant fails to provide the required information (or provides information which is false or misleading), this will be a criminal offence punishable by a fine of up to £5,000. There will however be an initial 12 month grace period to register before penalties apply.
In what circumstances must the owner or registered tenant provide information to the RCI?
The owner or registered tenant may have a duty to provide information to the RCI where another party has “significant influence or control” over the land in question (known as an “Associate”) and information about the Associate is not publicly available elsewhere.
This means that the owner or registered tenant may have to provide information to the RCI where:
- the owner or registered tenant is an entity such as a trust, partnership, overseas entity or an unincorporated body; or
- there is a contractual or other arrangement in place which gives another party “significant influence or control” over the owner or registered tenant’s dealings with the land.
Whether another party has “significant influence or control” over land under a contractual or other arrangement will depend on the terms of that arrangement, but option agreements, crofting tenancies and some older agricultural and residential tenancies may be caught.
The duty to provide information to the RCI is likely to be particularly relevant for estates, farms and other rural properties where ownership is often held in trust and partnership structures, and where contractual or other arrangements as outlined above may be in place.
If the duty applies, what information needs to be provided to the RCI?
The owner or registered tenant will need to provide the following information to the RCI:
- Details of the owner or registered tenant - including name, address and (if a non natural entity e.g. a company, a charitable incorporated association or a limited liability partnership) registered number.
- Details of the property or land – (where registered in the Land Register) the title number or (where not registered in the Land Register) the address or description.
- Details of the Associate – including name, address and contact details. An Associate can apply for their details to be withheld from the RCI if having that information publicly available would put them in personal danger.
Are there any exceptions?
The RCI is not designed to apply to owner-occupier situations or straightforward leasing arrangements (some older agricultural and residential tenancies may not be considered “straightforward”) or mortgage practices.
The RCI is also not intended to apply to entities where information about who has significant influence or control over the owner or registered tenant is publicly transparent elsewhere. This means that UK companies, certain charities, public authorities and limited liability partnerships do not have to provide information to the RCI, unless of course there is a separate contractual or other arrangement in place giving another party significant influence or control over the land in question.
The RCI will be maintained by Registers of Scotland, who are currently designing and building the service. It is expected that they will raise awareness of the RCI by providing more details, including who is in scope and what is required for submission, in advance of the 1 April 2022 opening date.
In the meantime, owners and registered tenants of land in Scotland may wish to consider whether they are likely to be affected by the RCI and what information they may be required to provide once the RCI is open.
This note is intended as a brief summary of the Register of Persons Holding a Controlled Interest in Land. No responsibility can be taken for any action taken in reliance on this note and specialist advice should be taken in every case. Turcan Connell would be happy to provide such advice.