Scotland’s Register of Persons Holding a Controlled Interest in Land – Update
On 1 April 2024, criminal penalties for non-compliance with duties under the Register of Persons Holding a Controlled Interest in Land (“RCI”) came into force. We asked one of our professional colleagues, Louise Johnston, a Partner at leading law firm Turcan Connell, to outline the implications.
What does the RCI cover?
The RCI contains details of who has significant influence or control over the Titleholder of land or property (we will simply say “land” for the purpose of this article) in Scotland. The “Titleholder” is the party who is named as the owner or tenant of the land in question in the Land Register of Scotland or in the Sasine Register
When do you need to submit an RCI entry?
The rules are complex, but generally a Titleholder must submit an RCI entry where another party has “significant influence or control” over the property in question (known as the “Associate”) and information about the Associate is not publicly available elsewhere. For example, if the Land Register of Scotland shows Ms Farmer as the owner of the farm and she then introduces the farm into the farming partnership with Mr Farmer, she must submit an RCI entry naming Mr Farmer as an Associate.
In most cases, the Titleholder must submit an RCI entry within 60 days of the arrangement being put in place. The Associate must inform the Titleholder that they are an Associate for RCI purposes, but only if they have not been notified by the Titleholder of an RCI entry within 67 days of the arrangement being put in place.
The RCI is not intended to apply to straightforward leasing arrangements or mortgages. UK companies and certain other entities subject to transparency regimes do not have to register in the RCI as Titleholders, although they can still be Associates.
Are there ongoing duties to keep the RCI up to date?
The Titleholder must keep the information in the RCI up to date, and any changes must be notified within 60 days. This includes any change of address of the Titleholder or the Associate. Another example would be where the land is partnership property and a new partner is assumed. In that case, the Titleholder must amend the RCI naming the new partner as an Associate. The Titleholder must remove the RCI entry if they sell the property.
An Associate must let the Titleholder know as soon as reasonably practicable if their details change, so that the Titleholder can attend to any updates. Specific duties apply to executors where a Titleholder or an Associate named in the RCI dies.
What are the penalties for noncompliance with duties under the RCI?
There are criminal penalties for non-compliance of a fine of up to level 5 of the standard scale, which is currently £5,000.
Submitting and updating entries
The RCI is kept by Registers of Scotland. Entries can be submitted or updated by a member of the public (as a Titleholder) or by professionals holding a Registers of Scotland account with RCI permissions. Turcan Connell hold a Registers of Scotland account with RCI permissions and would be happy to deal with RCI registrations and updates, both for existing clients and new clients.
Article by Louise Johnston, a partner at Turcan Connell qualified in Scottish and English & Welsh law.
