Register of persons holding a controlled interest in land (in Scotland)

The Register of Persons Holding a Controlled Interest in Land (RCI) is a Scottish register which holds information on those who have control or an influence over what owners and tenants in long leases do with their Scottish properties. Prior to the introduction of the RCI on 1 April 2022, there was no consistent method of clearly finding who had such an interest over Scottish properties. The RCI aims to improve transparency with free publicly available information accessible through the Registers of Scotland website.

The deadline for completing submissions to the RCI is 31 March 2024, having been extended by the Scottish Government from an initial deadline of 31 March 2023. From 1 April 2024 it will be a criminal offence not to have completed a submission to the RCI where one is required and penalties for failures to comply will become chargeable from that date.

Not all owners and tenants of Scottish properties need to make a submission to the RCI: an owner, or tenant under a registered or recorded lease (lease for more than 20 years), needs to submit an entry to the RCI if a particular type of arrangement is in place whereby other persons have significant influence or control over the owner/tenant. Also, certain types of owner/tenant are exempt from the RCI if subject to other specified transparency regimes (e.g. UK companies, Limited Liability Partnerships etc).

The person exercising the control or influence is known as an "associate" and that person may be an individual or an entity. The Regulations¹ list the arrangements which require an RCI submission as follows:

• Individuals: where Scottish land is owned or leased by an individual and a party has certain contractual or other arrangements with the owner or tenant;
• Partnerships: where Scottish land is owned or leased by or for a partnership and a general partner is not named on the title or a person has significant influence or control over a partner or the partnership;
• Trusts: where Scottish land is owned or leased for a trust and a trustee of the trust is not registered on the title or a person has significant influence or control over the owner or tenant or a trustee or the trust;
• Unincorporated bodies: where Scottish land is owned or leased for an unincorporated body and a person responsible for the general control and management of the administration of such body is not named on the title; and
• Overseas entities: where Scottish land is owned or leased by an overseas entity and a person holds more than 25% of the voting rights in or the power to appoint or remove a majority of the management body of the overseas entity or otherwise has significant influence or control over the overseas entity.

The rules about what constitutes control and influence are complex, depend on the type of owner/tenant and are subject to certain limited exceptions.

The following information is required when making an entry to the RCI:

• The name, address and registered number where appropriate of the owner or tenant and details of the capacity in which they own or lease the land;
• The title number or the postal address or a sufficient description of the land and ownership details; and
• The name, address and date of birth/registered number as appropriate of each associate and the date on which the association started; their unique RCI reference number allocated after their details are first entered into the RCI and, whether they are subject to another transparency regime such as the People with Significant Control regime for UK companies.

Where an associate who is an individual is under threat of violence or intimidation, it is possible to submit a security declaration to Registers of Scotland asking for their details not to be published.

Submissions to the RCI must be made by 31 March 2024 for all existing controlled interests in land and, where such an interest is acquired after that date, details must be submitted to the RCI within 60 days. Any changes to any information about the associate, owner or tenant, or controlled interest must be updated within 60 days. Failure to do so, or providing false or misleading information, is a criminal offence and may result in a fine of up to £5,000.

With the end of the grace period approaching, it is imperative to forward plan and make all required submissions to the RCI before 31 March 2024 to avoid penalties.

1 - Land Reform (Scotland) Act 2016 (Register of Persons Holding a Controlled Interest in Land) Regulations 2021/85 (Scottish SI)

The legal position on points covered in this article is correct as at the time of writing, but this area of the law is often subject to change and taking legal advice is recommended. To check the up-to-date position, or for further information or advice, please get in touch with your usual Brodies contact.