16 November 2022

With the amnesty period for registration running out, we examine the Register of Persons Holding a Controlled Interest in Land.

What is the RCI?

The Register of Persons Holding a Controlled Interest in Land (“RCI”), which went live on 1 April 2022,  implements requirements of the Land Reform (Scotland) Act 2016 for the establishment of a register to provide information on controlling interests in land in Scotland, where this may not be transparent from existing registers.

When should registration be completed?

Whilst the RCI has been in effect since 1 April, a 12 month grace period has been implemented, meaning that the final date by which any party caught within the scope of the Regulations requires to register is 31 March 2023. 

New registrations are triggered on acquisition of property or assumption of a registrable role and should be completed within 60 days.

Who is required to register?

Two separate categories of persons are required to register in the RCI.

The first of these is defined as the Recorded Person who is the owner or tenant (under a lease of more than 20 years), who does not fall within a list of specific exemptions, and who is holding title for the benefit of the second category of person, called an Associate.

A Recorded Person will be required to register in the RCI if the following situations apply:

• they are a partner holding title for a partnership
• they are a trustee holding title in trust for someone else
• they are a trustee ex officio holding title on behalf of an unincorporated body
• they are an individual holding title under a contractual arrangement where a third party has significant influence or control over the decisions about the land; or
• they are an overseas entity.

Those who are the subject of other ‘transparency regimes’ are exempt from registering in the RCI as a Recorded Person, so that for example, the following entities are not required to register because information relating to the controlling interest or benefit can be obtained from other public registers:

• UK Companies registered with Companies House
• Scottish Charitable Incorporated Organisations (SCIOs); and
• Limited Partnerships, including Scottish LPs and LLPs.

An Associate, namely a person or entity who possesses or exercises control and influence over the decision making with respect to the property, but does not themselves appear on the title to the land, must also register in the RCI. The requirements for registration of an Associate will depend on the manner in which the Recorded Person holds title.

In the case of a trust, for example, a trustee holding title will require to register as the Recorded Person, and any trustees not disclosed on the face of the title, will require to register as Associates, together with party exercising influence or control over the trust.

The scope of the RCI has been further limited by the exclusion from registration of a list of contractual arrangements. Of note, Powers of Attorney, divorce settlements and landlord-tenancy relationships are exempt from the Register.

One of the most frequent occasions when registration is likely to be triggered is in the case of title held by trustees ex officio of unincorporated bodies, such as sports clubs and village halls. If, for example, the title to the local golf club is held by individuals, named as trustees in their capacity as the Captain, Treasurer and other office bearers of the club, it is very likely that the title will refer to the original office bearers. Changes in the office bearers will not be reflected in the title, but it will be the current office bearers as trustees ex officio who currently have influence and control over decisions relating to the land held by the golf club, and as such it will be the office bearers from time to time who will require to be registered as Associates.

Where no trustee ex officio or partner named on the title remains in their role – for whatever reason – all of those currently acting as trustees ex officio or partners will require to dually register as both a Recorded Person and an Associate.

How do you register?

The responsibility for registration falls on the Recorded Person. The application is completed on the Registers of Scotland website, with the form split into four sections:

1. Recorded Person details – the information required will vary depending on whether the applicant is an individual or an organisation;

2. Land details – a separate application must be made for each property owned and controlled in a registrable manner;

3. Ownership details – this sets out why the registration has been triggered; and

4. Associate details – a ‘security declaration’ can be made to shield personal information from public view.

Alongside registration, the Recorded Person is also legally obligated to notify their Associates in writing that registration is (a) required and (b) complete. The initial notification must provide specific information and the completion notification takes a mandatory form.

Conversely, the Associate retains an obligation to update the Recorded Person should any of their registered information change.

Recorded Persons and Associates receive unique references to be used in future registrations or to update their information.

Why should you register?

Failure to register with the RCI can result in a criminal penalty, with a maximum fine of £5,000. However, this does not prevent a ‘should-be-recorded-person’ from acquiring or disposing of property and they can continue to register such acquisitions and dispositions in the Land Register of Scotland. 

This can be compared to the more stringent requirements of the ‘Register of Overseas Entities’, administered by UK Companies House, which was also introduced in 2022 with the intention of monitoring and regulating the foreign ownership of UK land, and where failure for an overseas entity to register can disrupt the title registration process.

Nonetheless, registration is still a legal requirement for those falling within the scope of the Regulations.

Despite this, to date, compliance has been remarkably low. As of 15 November 2022, only 7 properties in the City of Edinburgh had been listed in the RCI. This would suggest there is a lack of awareness of the RCI and the accompanying requirements. Additionally, given there is a minimum 30-day delay between applying and registering, allowing for security declarations to be made, applications should be made sooner, rather than later.

If you think you or your business may require to register as either a Recorded Person or an Associate, BTO would be happy to assist you in your determination and with any subsequent application. 

Lucy Ferguson, Trainee Solicitor (Author of article): lfe@bto.co.uk / 0141 221 8012

Graeme Kelly, Partner: gak@bto.co.uk / 0131 222 2939