Register of Persons Holding a Controlled Interest in Land (“RCI”)

Update 26 January 2023

Register of Persons Holding a Controlled Interest in Land - appreciating a delay

We rarely appreciate a delay, often perceiving them as a cause of frustration. So we are happy to report on a delay with a positive repercussion for those clients affected by the new Register of Persons Holding a Controlled Interest in Land (“RCI”).

The delay relates to the transitional period for registration under the Land Reform (Scotland) Act 2016 (Register of Persons Holding a Controlled Interest in Land) Regulations 2021 ("the Regulations").  Although the Regulations came into force in April 2022, they provide for a transition or grace period, originally due to end on 31 March 2023.  It allowed a period for new registrations, during which the offences under the Regulations were postponed.

This week, the Scottish Government recommended to the Parliament a 12 month extension of the grace period. This means that any entity or individual in scope of the Regulations now has until 31 March 2024 to prepare submissions and register before being at risk of penalty.

Publication of the legislation to bring this change into effect is still awaited.

If you have any questions relating to your potential obligations under the RCI Regulations, please get in touch.

01 April 2022

The 1^st of April 2022 will see the coming into force of the latest piece of land reform legislation in Scotland, namely the Register of Persons Holding a Controlled Interest in Land (“RCI”) created by  The Land Reform (Scotland) Act 2016 (Register of Persons Holding a Controlled Interest in Land) Regulations 2021 (legislation.gov.uk) and The Land Reform (Scotland) Act 2016 (Register of Persons Holding a Controlled Interest in Land) Amendment Regulations 2021 (legislation.gov.uk) (together the "Regulations").

The Regulations and the information required to be submitted to RCI are aimed at increasing public transparency of individuals who have significant control or influence over the owner or tenant (of a long lease of more than 20 years) in respect of their decision making relative to land they own or tenant in Scotland.

The Regulations create new and additional statutory compliance requirements on specified categories of owners of land and tenants of long leases.  Detailed guidance is yet to be published but for more details on the Regulations, the duties and offences for failure to comply see our guide.

Key points to note are:

• Key Dates: The Regulations provide for a transitional period from 1 April 2022 until 1 April 2023 to allow owners or tenants and their associates to register in RCI after which penalties will apply.
• Are you in scope? To be a Recorded Person you must own or tenant land in Scotland.  To be an Associate you must be someone who exercises significant influence or control over a Recorded Person’s ability to make decisions in relation to land they own or tenant.
• Are you exempt? There are 5 categories of Recorded Persons and Associates and each has various exceptions set out in Schedule 1 of the Regulations, with universal exceptions set out in Schedule 2.  The main exemptions include:
  • Specified entities that already report to the Register of People with Significant Control (“PSC”) which includes UK companies, LLPs and Scottish Limited Partnerships.  The RCI does not require double reporting for such entities.
  • Charitable incorporated organisations and Scottish charitable incorporated organisations
  • Public authorities subject to Freedom of Information legislation.

• Duties: Recorded Persons with an Associate have the initial duty to register and that within 60 days of the association.  The Associate also has duties if the owner or tenant fails to do so.
• Offences: It is a criminal offence not to comply with the Duties under the Regulations punishable by a fine.  There is a grace period until 1 April 2023 in which specified offences are postponed allowing persons and entitles 12 months in which to register if required to.

What to do now?

If you think you are in scope you can complete your registration personally using Register of Scotland’s online services.  There is a list of information that is required including details of the land, the Recorded Person(s) and Associate(s) name(s) and address(es) and you must complete the notification(s) required by law.

Alternatively, we will be happy to assist you in determining whether or not you are in scope and assist with any relevant registration(s).