Register of Persons Holding a Controlled Interest in Land (“RCI”)
Date: 25/03/2022 | Business & Professional Services, Construction, Healthcare, Planning, Real Estate, Residential Development
From 1 April 2022, the Register of Persons Holding a Controlled Interest in Land (“RCI”) will be created. This new register is designed to record any person or entity which has a significant influence or control over the owner or tenant (having a lease for a duration longer than 20 years) of property in Scotland.
Background
The relevant legislation places obligations on all owners and applicable tenants of property or land in Scotland, to provide certain details in the new register. This has very wide implications for owners and applicable tenants of land in Scotland. Recent events surrounding sanctions on Russian oligarchs have made transparency of ownership a headline issue. The new RCI is intended to better answer the question: “Who owns Scotland?”.
From 1 April 2022, certain entities and individuals who own or lease land under a lease having a duration in excess of 20 years (known as “recorded persons”) will have a legal duty to provide certain information to the Registers of Scotland about the entities and individuals who are not shown on the title of the relevant land but nevertheless have a degree of control over that land (known as “associates”). The new provisions will not apply where that controlling interest is disclosed elsewhere (such as through the Persons with Significant Control register held at Companies House).
An example would be where a partnership owns land in Scotland and the title discloses two of the partners but does not disclose a third partner who was assumed after the land had been purchased. In those circumstances the two partners shown on the title would be required to register the interest of the third partner.
Who is affected?
There are five main categories of persons or entities which will be required to provide details for the new Register:
- Persons who have certain contractual or other arrangements with an individual (holding land for another).
- Partnerships and persons who own or tenant land on their behalf.
- Trusts and persons who own or tenant land as trustees of that trust.
- Unincorporated bodies and persons who own or tenant land on their behalf; and
- Overseas entities.
If you fall into one of the five categories above, it is likely from 1 April 2022 you will have new legal responsibilities in relation to your property.
“Associates” (those who have an element of control or decision making over land or property) also have duties, namely not withhold the information required to make an entry in the new Register and to respond timeously to a request for any information which needs to be registered. There are only very limited exceptions to this requirement to provide information.
When do you need to make a notification in the new Register?
- For current owners and applicable tenants, the relevant information needs to be provided to the Registers of Scotland on 1 April 2022. There is a one-year transitional period before enforcement measures are taken for non-compliance.
- If a change in ownership occurs, or if an applicable tenancy ends, there is a period of 60 days following the transfer to make the relevant change to the Register.
- If a change in associate occurs, there is a period of 60 days to make the relevant change to the Register.
What happens if you do not register by April 2023?
Failure to comply or providing misleading or false information is a criminal offence and subject to a fine of up to £5,000.
If you believe you may be affected by the new regulations, please get in touch and we can advise on what you will need to do in order to comply with the new reporting requirements.
