Register of Persons Holding a Controlled Interest in Land – A reminder!

The extended grace period for registration by specified categories of owners of land and property and tenants of long leases (persons holding a controlled interest in land) ends on 31 March 2024.

As detailed in our previous insights on the Register of Controlled Interests (“RCI”), the RCI seeks to increase public transparency around who owns and controls land and property in Scotland. The related regulations have been in force since 1 April 2022, creating new and additional statutory compliance requirements on specified categories of owners of land and property and tenants of long leases. Failure to comply with obligations under the regulations can result in criminal sanctions, which can include a fine of up to £5,000.

Recognising the scale of the task, the Scottish Government extended the grace period for making a submission to the RCI to 31 March 2024.

What you need to know about the Register of Controlled Interests (‘RCI')

Details are set out in our previous insights, but by way of reminder, the key points you need to know are:

• Key dates: The transitional period ends on 31^st March 2024, after which the enforcement of penalties, which can include a fine of up to £5,000, will apply.
• Interests in land and property: The RCI is applicable to existing land and property interests in Scotland and any new holdings going forward. Where the underlying controlling interest changes, the duty to register could be triggered by those new arrangements. It is important to remember that there is an ongoing duty, placed on Recorded Persons, to keep the RCI up to date beyond the initial submission.
• Do you need to make a submission to RCI? The owner or tenant of land (under a registered long lease) has a duty to register the controlling interest of an Associate in the RCI. In the event that there is an Associate, the owner or tenant is then termed a ‘Recorded Person’ for the purposes of the RCI, and (unless an exemption applies) will be bound to register their required details and those of the Associate.
• Who is an Associate? An Associate is someone who exercises significant influence or control over a Recorded Person’s ability to make decisions in relation to land or property they own or tenant. Determining an Associate of a Recorded Person is not always straightforward.

Guidance notes by the Registers of Scotland and the Scottish Government give many examples of how the Associate relationship can arise, but these can be difficult to interpret, so a full assessment of the facts and circumstances surrounding the control of each holding is necessary. We’ve also produced a handy guide.

• Are you exempt? The regulations are complex, but many exemptions do apply and these must be considered first. There are five categories of Recorded Persons and Associates, and each category has various exceptions. There are also universal exemptions for entities that are subject to other transparency regimes, which include:
• Specified entities that already report to the Register of People with Significant Control (“PSC”) which includes UK companies, LLPs, Scottish Limited Partnerships, Societas Europaeae and Scottish General Partnerships where all the general partners are limited companies. The RCI does not require double reporting.
• Charitable incorporated organisations and Scottish charitable incorporated organisations.
• Public authorities subject to freedom of information legislation.
• Your duties: If the exemptions do not apply and you have identified that you are a Recorded Person with an Associate, you have an initial duty to register the Associates with RCI, and that within 60 days of the start of the association or immediately if it is an already established relationship.The Associate is also obliged to ensure the Recorded Person has carried out their duty, by providing the required details to allow a registration to be made.

What to do now?

If you are in scope, you can complete your registration using Register of Scotland’s online services.

Alternatively, we would be happy to assist you in determining whether or not you are in scope and assist with any relevant registration(s) – get in touch with your usual Burness Paull contact, or Sarah Taylor.