Article updated March 2023

Introduction

The Scottish Register of Persons Holding a Controlled Interest in Land (RCI) is aimed at improving transparency on who controls and makes the decisions relating to property in Scotland. Individuals with a contractual or other arrangement in respect of their Scottish property and trusts, partnerships, unincorporated bodies and overseas entities that own or hold a long lease of Scottish property should consider whether an RCI submission may be required.

About the RCI 

  • 1. What is the Register of Persons Holding a Controlled Interest in Land (RCI)?

    The RCI is a register that holds information about people who control or influence what the owners or tenants of Scottish land and buildings do with their properties. It aims to improve transparency of property ownership, to make it clear if there is someone behind the registered owner/tenant who is 'pulling the strings' in relation to a Scottish property. This would not always be obvious from the property registers, which is why the RCI has been introduced.

    Each entry in the RCI is specific to a property in respect of which there is some sort of controlling interest over the owner/tenant, or someone else sitting behind the registered owner/tenant. An entry will contain information about the owner/tenant of the property, as well as information about the persons who are associated with the owner/tenant (i.e. the influencers or controllers, which includes off-register trustees/partners).

  • 2. Where can I find the rules that govern the RCI?

    The rules that govern the RCI are set out in The Land Reform (Scotland) Act 2016 (Register of Persons Holding a Controlled Interest in Land) Regulations 2021, with more information provided in the accompanying explanatory document.

  • 3. When did the RCI become operational?

    The RCI became operational on 1 April 2022. However, there is a two-year grace period running until 31 March 2024, before non-compliance with the RCI regulations becomes a criminal offence and before penalties will be chargeable for failure to comply.

  • 4. Where is the RCI held?

    The RCI is held by Registers of Scotland and is publicly available to access online.

    Registers of Scotland have set up a webpage to provide information about the RCI.

  • 5. When is the RCI relevant?

    The RCI is only relevant if Scottish property is owned, or leased under a long lease, by certain 'in scope' categories of owner/tenant – see question 6 below.

    Further a submission to the RCI is only required if the owner or tenant who appears on the registered title or lease of the property has what is known as a 'controlled interest in land'.  This occurs where another person, known in the RCI regulations as an 'associate', has a 'controlling interest'.  The rules to establish whether there is a controlling interest are complex.  Examples are if there is a trustee or partner who does not appear on the registered title and/or if there is someone other than the registered owner/tenant who has a say in any sale, leasing or mortgaging of the property, or in granting heritable rights such as access over the property or changing its use.

Submitting Information to the RCI

  • 6. In what circumstances does a submission need to be made to the RCI?

    In general, a submission to the RCI may be required if the following four conditions are all met:

    Scottish property: If there is a Scottish property in respect of which ownership or a lease/sub-lease is registered in the property registers, i.e. the Land Register of Scotland or the older Sasines Register. It does not matter when the property or lease was registered in the Land Register of Scotland/Sasines Register.  Note that leases/subleases can only be registered in the property registers if at some point they had a duration of longer than 20 years.

    'In scope' type of owner/tenant: If the property is owned or leased in the name of:

    • an individual with a contractual or other arrangement in respect of the property;
      • a partnership or trustee(s), partner(s) or other person(s) on behalf of a partnership;
      • trustee(s) or other person(s) on behalf of a trust;
      • an overseas entity which is recognised as a legal entity in the country in which it was constituted, and/or
      • trustee(s) or other person(s) on behalf of an unincorporated body.


      Not already transparent: If the owner or tenant is not already subject to certain other transparency regimes, such as UK companies and Limited Liability Partnerships which are subject to the Persons with Significant Control regime, Scottish Charitable Incorporated Organisations and Charitable Incorporated Organisations (England and Wales) and bodies that are subject to the Freedom of Information regimes.  Note that the fact that an overseas entity has registered in the UK Register of Overseas Entities does not currently exempt it from requiring to make a submission to the RCI.

      Associate with significant influence or control: If there is an associate.  The rules to determine this are complex, however broadly speaking an associate is someone not noted on the registered title or lease who exercises (or has a right to exercise) significant influence or control over dealings with the property.

      If all of the four conditions above are met, there will be a relevant controlled interest in land which will require an RCI submission. If any of the four conditions above is not met, then no RCI submission is needed.


    • 7. What is meant by significant influence and control?

      The control referred to is an ability to direct the activities of the owner or tenant. Having significant influence means being able to ensure that the owner or tenant will typically adopt the approach that the associate would like taken.

      How control and influence are measured or ascertained will depend on the type of owner or tenant. To give some examples:

      • In the case of an individual, if they hold the property as nominee for someone else, that person will be an associate.
      • In the case of a trust, a person who is not noted on the registered title/lease but is entitled to dictate how the trust funds are distributed, or to appoint or remove trustees, could be seen to have significant influence and control and therefore be deemed an associate. A trustee who is not noted on the registered title/lease would also be an associate regardless of whether they exert influence or control.
      • In the case of an unincorporated body, a person who is not noted on the registered title/lease but who is responsible for the general control and management of the administration of the unincorporated body (e.g. an office bearer) will be an associate.
      • In the case of a partnership, a general partner who is not noted on the registered title/lease would be an associate, as would someone who is not noted on the registered title/lease but is entitled to unilaterally take or veto governance decisions, or to appoint or remove partners.
      • In the case of an overseas entity, someone who has more than 25% of the voting rights would be an associate, as would someone with power to appoint or remove a majority of the board of directors.

      These are just examples, and other persons with influence or control may also be caught by the RCI regulations. The rules about what constitutes influence and control for each type of 'in scope' owner or tenant are complex and wide-ranging, and there are also various exceptions in each case.

    • 8. Who is it that needs to make the submission to the RCI?

      It is the registered owner (or tenant) of the property who is under a duty to submit the required information to the RCI. They must first have taken reasonable steps to verify the information with the associate, and to notify the associate of their rights and duties under the RCI regulations. They must also notify the associate once the submission has been made to the RCI.

      The associate must verify the information when requested to do so, and associates are also subject to various other duties under the regulations.

      Non-compliance is a criminal offence, although there is an initial two-year grace period until 31 March 2024.

    • 9. When does an RCI submission need to be made?

      1. Details of all existing relevant controlled interests in land should be submitted to the RCI by the expiry of the grace period on 31 March 2024. 
      2. Going forward after 31 March 2024, if an 'in scope' type of owner or tenant acquires a relevant controlled interest in land or has an existing interest in land (i.e. ownership or a long lease) which becomes controlled, details must be submitted to the RCI within 60 days.
      3. If there are any changes to the information that has been submitted to the RCI (e.g. changes to the associate, the owner/tenant or the controlled interest), updated information must be submitted to the RCI within 60 days after the change takes place.


    • 10. What information needs to be submitted to the RCI?

      Details need to be submitted about:

      • The owner/tenant of the property, including their name, address, any registered number, their unique RCI reference number (if they have one), the capacity in which they hold the property (e.g. as trustee) and (if applicable) who they hold the property for (i.e. the name of any partnership, trust or unincorporated body)
      • The property, including the address and any title number (or if there is no title number or postal address, a description and the approximate location and size of the property); and
      • The associate, including their name and address, any registered number, their date of birth if an individual (although this will not be published), the associate's unique RCI reference number (if they have one) and the date their association with the owner/tenant started.

    • 11. How do you make a submission to the RCI?

      This is done online, on a Registers of Scotland RCI webpage.

      Submission to the RCI can be done by the owner/tenant of the property, or it can be done by an agent on their behalf (e.g. their solicitor).

    • 12. Will my solicitor automatically submit the required details to the RCI?

      No, not automatically. It is the responsibility of the owner/tenant of the property to comply with their duties under the RCI regulations, unless it has been expressly agreed otherwise with their solicitor.

    • 13. How much does it cost to submit details to the RCI

      No fee is charged by Registers of Scotland for submitting information to the RCI.

    • 14. Is it possible to deal with property if the required information is not submitted to the RCI?

      Yes. Failure to comply with the requirements to make and update an RCI submission does not prevent a property transaction completing. It is still possible to sell, lease and grant security over a property and to register the transfer/lease/security deeds at Registers of Scotland. This contrasts with the position in the UK Register of Overseas Entities (ROE), where Registers of Scotland will block registration of transfer/lease/security deeds if there has been a failure by an overseas entity to comply with ROE registration and updating requirements.

    • 15. What penalties apply if the required information is not submitted to the RCI?

      It is a criminal offence, punishable by a fine of up to £5,000, to fail to provide the required information to the RCI, or to provide false or misleading information. It is also a criminal offence to fail to comply with various other requirements set out in the RCI regulations.

      Individuals within an organisation may be found personally culpable if they hold a controlling position in the organisation and have consented to or conspired in an offence, or where their lack of care caused such an offence.

      However, there is an initial two-year grace period running until 31 March 2024 during which time penalties for failure to comply will not be charged.

    Searching the RCI

    • 16. Can I search the RCI?

      Yes, the RCI can be searched online by members of the public, or by a solicitor on their behalf. To search the RCI, one of the following will be needed:

      • a property postcode, address or description;
      • a person's name;
      • an organisation's name;
      • an organisation's registered number;
      • a title number; and
      • an associate's unique RCI reference number (ARN)
      • an owner/tenant's unique RCI reference number (RPRN)

      When searching, it must be borne in mind that the RCI is not necessarily completely up-to-date. This is for two reasons. Firstly, the RCI regulations allow a 60-day window within which information must be submitted to Registers of Scotland. Secondly, Registers of Scotland need to wait at least 30 days after receiving the information before publishing it in the RCI.

    • 17. How much does it cost to search the RCI?

      There is no cost to search the RCI.

    Privacy

    • 18. Can personal details be withheld from the public?

      There is no general exemption from the RCI on grounds of confidentiality or privacy. However, there is a right to be excluded from the RCI if disclosure of the information would put the associate at serious risk or threat of violence, abuse or intimidation. In this case, a security declaration can be made to Registers of Scotland, along with supporting evidence.

      Registers of Scotland must wait for at least 30 days after receiving an RCI submission before entering it in the public RCI. This allows time for the associate to apply for a security declaration.

    The rules about 'controlled interests in land' are complex and so legal advice should be taken on property ownership and leasehold arrangements and structures which could be subject to the RCI regulations. If you think that the regulations may apply to you, please get in touch for further advice.

    The above is a summary of the rules and regulations relating to the RCI and should not be relied on in specific circumstances.

    The above article was updated in November 2023

    Contributors

    Catherine Reilly

    Director of Knowledge & Innovation (Real Estate)

    Lisa Cruickshank

    Practice Development Lawyer