Not Revealed – 239,000 ha of offshore ownership.

As part of the efforts of Governments across the UK, the Register of Persons Holding a Controlled Interest in Land (RCI) was established in Scotland as part of the Land Reform (Scotland) Act 2016 and implemented by The Land Reform (Scotland) Act 2016 (Register of Persons Holding a Controlled Interest in Land) Regulations 2021. The Register is kept by the Keeper of the Registers of Scotland and came into force in April 2022. There are fines for non-compliance but these have been suspended for a grace period of two years which ended on 31 March 2024.

The Regulations require Trusts, Partnerships, Unincorporated Bodies and Overseas Entities to register any persons who control the entity, commonly known as beneficial ownership. It also requires registration of persons in certain contractual relationships.

This blog examines Overseas Entities and whether all relevant entities have registered or not by the deadline. The entities examined are a list of 71 offshore companies who between them own 262,489 ha of land in Scotland.

There are exemptions in the Regulations whereby entities subject to other transparency regimes do not need to register. For overseas companies the main exemptions are a) where an entity is covered by the Persons of Significant Control (PSC) regulations under the Companies Act and b) where an entity is registered in the EU as a public company. PSC regulations cover offshore companies with a place of business in Scotland.

Of the 71 entities examined that are in scope of the Regulations,

  • 57 own more than 1000 ha of land covering 255,772 ha (97% of the land in scope)
  • Only 13 are registered on the RCIL covering 23,285 ha (9% of land)
  • 58 have failed to register by the deadline. They represent 239,204 ha of land or 91% of the land in scope

Those failing to register include the following,

  • The Inverinate Estate (25,485 ha) owned by Smech Properties Ltd in Guernsey and understood to be ultimately owned by Sheik Bin Rashid Al Maktoum
  • Ben Alder Estate (11,086 ha) owned by Compania Financiera Waterville SA (Panama) and Agro Invest Overseas Ltd (Guernsey)
  • Kilnaish Estate (122 ha owned by Highland Titles OÜ (Estonia)
  • East Benula Estate (1761 ha) owned by Chooky Corporation in Panama
  • Aberuchill Estate (1341 ha) owned by Forestborne Ltd. (British Virgin Islands) and ultimately owned by Russian steel magnate Vladimir Lisin.
  • Cluny Estate (3560 ha) owned by Cluny Estates Ltd. and ultimately owned by the Qatar Royal family.

The Register of Overseas Entities (ROE) is a separate Register established under the Economic Crime (Transparency and Enforcement) Act 2022 in the wake of the invasion of Ukraine

Overseas entities who own land in the Scotland are required to make a declaration in this Register if they acquired land after 8 December 2014.

The penalties for non-compliance with ROE duties are far stiffer than for the RCI. They include fines of £500 per day, a maximum prison term of 5 years and blocking any sale of the land in question. By contrast, the maximum penalty under the Scottish regime is a one off fine of £10,000.

Of the 58 properties that are not on the RCI but should be, 38 are on the ROE (166,498 ha or 70% of extent) and 20 are not(72,706 ha or 30% of extent).

There are, of course thousands of Scottish properties owned offshore. The Registers of Scotland has just published its annual Country of Origin report which contains an analysis of those recorded in the Land Register (which only covers 52% of Scotland), the vast majority of which will be exempt from registration in the RCI.

It is not clear why there is such widespread failure to register in the RCI. Perhaps £10,000 is seen as the price of maintaining secrecy.

I will co-operate with any law enforcement agencies who wishes to examine my full analysis.