Register of Persons Holding a Controlled Interest in Land: Explanatory Document

Explanatory Document prepared in accordance with section 41(2)(a)(ii) of the Land Reform (Scotland) Act 2016

Introduction

1. This document has been prepared under sections 40 to 42 of the Land Reform (Scotland) Act 2016 in respect of the Land Reform (Scotland) Act 2016 (Register of Persons Holding a Controlled Interest in Land) (Scotland) Regulations 2021 ("the Regulations").

2. It has been prepared by the Scottish Government in order to assist the reader of the Regulations. It should be read in conjunction with the Regulations and where a regulation does not appear to require an explanation or comment, none is given.

Purpose of the Regulations

3. The overarching purpose of the Regulations is to increase public transparency in relation to individuals who have control over decision-making in relation to land. They are intended to ensure there can no longer be categories of land owner or tenant where, intentionally or otherwise, control of decision-making is obscured. In conjunction with other transparency regimes, this means that it will be possible to look behind every category of entity in Scotland, including overseas entities and trusts, to see who controls land. We do not require double reporting for entities subject to other regimes as we do not want to duplicate existing publicly available information. The Regulations will also aid policy making by enabling a fuller picture of those individuals who have control over decisions about land in Scotland.

4. A consultation on the policy proposals for a new register was carried out from September – December 2016. Responses and an analysis of the response were subsequently published online^[1]. A further consultation on the policy proposals for a new register was carried out from June – November 2018. Responses and an analysis of the responses were subsequently published online^[2].

5. The consultation document explained at paragraph 18:

"The Scottish Government is keen to ensure that land in Scotland is sustainably owned, used and developed in the interests of land owners, communities and wider society. Improved information about who controls land owners and tenants in Scotland will therefore help empower people, including community groups, and give them the opportunity to understand who is in control of land owners and tenants. This transparency should also allow people to engage constructively with any person with a controlling interest who makes decisions in relation to land that might have an impact on sustainable development."

6. The Register of Persons Holding a Controlled Interest in Land will require categories of entities who may own land in Scotland and where the controlling interests in the entities is not currently transparent, to make details of their controlling interests publicly available.

Contents

7. This Explanatory Document is divided into 2 Chapters.

8. Chapter 1 explains Parts 1-5 of the Regulations, which concern: the functioning of the Register, the duties on persons to provide information for entry onto the Register, the role of the Keeper as registrar, how information in the Register will be maintained, and the non-disclosure of information in the Register in exceptional circumstances. This Document sets out how these proposals will work and the policy rationale behind them.

9. Chapter 2 explains Schedules 1, 2 and 3 of the Regulations. These concern who is to be registered in relation to each category of owner or tenant and which categories of owner or tenant will be excluded from the draft regulations as proposed. It also sets out details of the evidence required to support a security declaration.

Summary of the Regulations

10. The Regulations require that a new Register be created – the Register of Persons Holding a Controlled Interest in Land. This is referred to throughout as 'the Register' (although in the Regulations themselves, it is referred to as the "RCI").

11. The Register will contain information about the persons who can influence or control owners and tenants of land. As such, there will be an entry for each controlled person detailing who is in a position to influence or control them.

12. Duties will be placed on owners and tenants of land, and persons who can influence or control them, to provide information for inclusion in the Register. This information will enable members of the public to engage with the respective parties. It will be a criminal offence not to comply with the duties, punishable by a fine.

13. The Register will be created and held by the Keeper of the Registers of Scotland who will be under duties to enter the relevant information onto the Register, and to act on any notices provided to her if there are changes in the relevant information.

14. The Keeper will have the power to amend the Register should the information in it be inaccurate, and questions about the accuracy of information in the Register can be referred to the Lands Tribunal.

15. Individuals whose information is to be included in the Register as a person with influence or control over another may make a "security declaration". This would be made on the basis that inclusion in the Register of one or more of the individual's required details would put them, or another person connected to them, at risk of violence, abuse, threat of violence or abuse, or intimidation. While a security declaration is in force no information about that individual will be disclosed in the Register.

16. The Regulations apply to owners of land and tenants of registrable leases (that is, leases of over 20 years). The Regulations primarily seek to address two particular scenarios in which there is currently a lack of transparency as to the control or influence of the decision-making of an owner or tenant of land. Firstly, where the legal owner or tenant of the land is an opaque legal entity, such as an overseas company, or secondly, where they hold the title or lease in an arrangement which is not necessarily discernible from the Land Register itself, such as a trust arrangement.

17. Accordingly, the Regulations will result in the disclosure of information about persons who have influence or control over the person listed as the owner or tenant of the land by means of the existence of one of the following types of association:

• 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; or
• an overseas legal entity.

18. Where information similar to that which is required for the Register is already reported and publicly available, the information is not duplicated in the Register. This prevents the same information being gathered, recorded and held in different places, and minimises the administrative burden on public services and those who are already under requirements to report this information elsewhere. Categories of entities who are an owner or a tenant of land and who meet this condition are therefore not required to provide information for inclusion in the Register as an owner or tenant of land. They may, however, still be recorded as an associate of another owner or tenant of land.