This public register provides key information about those who ultimately make decisions about the management or use of land, even if they are not necessarily registered as the owner, including overseas entities and trusts.
The information will enable individuals and communities to identify and engage with those who make decisions about land that affects them.
The RCI is a register of persons who own or are tenants of (under a long lease of more than 20 years) land, including entities with legal personality.
Entries flow from the recorded person, who is obliged to disclose persons who have significant influence or control over decisions in relation to land, known as associates. Penalties for non-compliance will come into force at the end of a 12-month transition period in April 2023.
Anti-money laundering
The Scottish Government has been fully supportive of measures to improve the transparency of land ownership, including the Register of Overseas Entities (ROE) which is being introduced by the UK Government’s Economic Crime Act 2022. ROE will apply to any legal entity that is governed by the law of a country other than the UK, but which owns land in the UK. Whilst the purpose of the RCI focuses on transparency of land ownership, the ROE aims to combat illegal activities such as money laundering by increasing transparency about the beneficial owners of land.
Economic Crime Bill receives Royal Assent
The new Economic Crime (Transparency and Enforcement) Act received Royal Assent today, 15 March, following an expedited passage through Parliament.
Environment and Land Reform Minister, Mairi McAllan MSP, stated there can no longer be categories of landowner or tenant where, intentionally, or otherwise, control of decision-making is obscured, including in or via overseas trusts or entities. The new register will make Scotland a frontrunner in Europe and deliver greater transparency than any other part of the UK. It enables the public to look behind land ownership and identify those who ultimately make decisions.
The register is good in theory, but an exemption for companies incorporated under the Companies Act makes little sense. How will this improve the transparency of complex company structures which is primarily what it sets out to do?
To help maintain the integrity of the market not only is it vital to know who the owner of land or property is but there is also transparency in relation to those who have ultimate control over decision-making in relation to land making it more difficult for fraudsters to hide behind complex structures.
It’s right the register is free and publicly accessible and it has the potential to add some robustness to the checks estate agents must already complete prior to sale to comply with their anti-money laundering obligations. But to do that it must close existing loopholes, not leave them some of them wide open.
With any regulatory instrument that requires self-declaration the measure of its success will be in how effectively it’s policed and enforced.
For agents, they may want to check they fully understand the requirements of the register and its exemptions so they can advise clients whose property they manage accordingly to ensure they are fully compliant before the one-year grace period expires and fines of up to £5,000 for breaches come into effect.
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