Increased transparency in land ownership

In early February, the third and final draft of The Land Reform (Scotland) Act 2016 (Register of Persons Holding a Controlled Interest in Land) (Scotland) Regulations 2021 (“the Regulations”) was approved by MSPs, and was published in final form on 17 February 2021. The Regulations are due to come into force on 1 April 2022 and the new Register will become operational from the same date.

The aim of this is to increase public transparency in relation to individuals who have control over decision-making in relation to land. We highlight the key details to be aware of.

In a nutshell

A new register called the Register of Persons Holding a Controlled Interest in Land (to be known as the “RCI”) will be created.  There will be an entry in the RCI for each controlled person with information relating to who is in a position to influence or control the person.

Holding of the information

The RCI will be created and held by the Keeper of the Registers of Scotland whose duty will be to enter the relevant information on to the RCI and to act on any notifications of changes.

Application of the Regulations

The Regulations will apply to owners of land and tenants of registrable leases (leases of over 20 years).  The owner or tenant whose identity is disclosed in the Land Register or the Register of Sasines will be referred to as the “recorded person”.

Who is an “associate”?

In short, an “associate” is the person who exercises significant influence or control over the recorded person. The different types or categories of association are:

• A contractual or other arrangement with a person to give that person influence or control over significant decisions in relation to the land;
• A partnership, including any Scottish partnership where at least one partner is an individual;
• A trust;
• An unincorporated association; and
• An overseas legal entity.

Where a person has influence or control over the recorded person by means of the existence of one of the types of association listed above, then the Regulations will result in the disclosure of information about that person.

Duties for associates

Where a person knows that he/she is an associate of a recorded person but has not received a notice of this from the recorded person, then such an associate must notify the recorded person of this and provide the required details. Failure to do this constitutes an offence.

Security declarations

A person with influence or control over another and whose information is to be included in the Register may make a security declaration. It should explain that entry in the RCI of one or more of that person’s details would put that person (or another person connected with them) at risk of violence, abuse, threat of violence or abuse or intimidation.  No information about that individual is to be disclosed in the RCI while a security declaration is in force.

Compliance and enforcement

It will be a criminal offence not to comply with the duties to provide information in the Register.  The maximum penalty imposed under the Regulations is £5000 and applies to most of the offences.

Transitional period

The transitional period is a period of 12 months.

The Regulations are due to come into force from 1 April 2022 and in terms of compliance, there will be a 12 month period during which owners and tenants in land, and their associates, should provide the required information to the Keeper.  This means that the offences for failing to register won’t come into force until 1 April 2023.

Duplication of information with other publicly held registers

There is a desire to prevent the same information being collated and recorded in different places.

Therefore where information similar to that required for this Register is already disclosed and publicly available elsewhere (for example, under the UK corporate people with significant control (PSC) register held by Companies House) the information is not duplicated in this Register.  Persons/bodies who are subject to other transparency regimes are listed and are exempt from providing information.

For information on how this will affect family farming partnerships and trusts, or to know more about the position for agricultural tenancies, or if you have any questions about the Regulations generally, please contact Elizabeth.

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