Wright Johnston and Mackenzie Solicitors

Register of Persons Holding a Controlled Interest in Land

2nd April 2022 

A new compliance regime came into force on 1 April 2022 which may affect any healthcare practice which is legally established as a traditional partnership. GP practices are likely to be particularly affected by this new regime, as the vast majority of practices are set up as partnerships.

Such a partnership will need to take positive action if either:

· the practice owns the practice premises; or
· the practice holds a long lease interest in the premises (a ‘long lease’ means a lease which has a duration of more than 20 years).

If neither of these circumstances applies, then the practice does not need to concern itself with the remainder of this article.

If either of these circumstances do, however, apply, then action is required. As there are significant penalties for non-compliance of up to £5,000 for each offence, this is an important matter.

The Register of Persons Holding a Controlled Interest in Land (‘RCI’) is a new public register of indirect ownership or controlling interests in land and buildings. Its aim is to ensure transparency as to the persons who ultimately have control of such land and buildings.

If either of the two circumstances applies, then this register will require a partnership to take the following steps:

1. compare the names of the individuals in whose names the title or lease is registered in the relevant property register (either the Land Register or the Register of Sasines) with the names of the current principal partners of the practice

2. where those names differ from the current principal partners, the practice will need to register details of at least the current principal partners in the RCI. Specifically, the RCI has introduced the concept of “associates”, being those with a controlling interest that are not currently registered in the relevant Scottish property register. The details of those associates will require to be recorded in the RCI. The practice will need to register these details within 60 days of 1 April 2022, although there is a one-year grace period from 1 April 2022 before any penalties apply.

3. each time that a new principal partner is appointed, the practice will need to register details of that person with the RCI within 60 days of the event

4. in both cases (1) and (2) the practice will need to notify within 7 days the person whose name has been successfully registered in the RCI

Given the number of changes of partners in a typical practice, we appreciate that this new register will impose an administrative burden on a practice. WJM is here to help and, if a practice wishes us to assist you comply with this new registration requirement, please do get in touch by e-mailing Michael Dewar at mjd@wjm.co.uk.

We would also be happy to discuss with you two alternatives to registering with the RCI:

1. it is open to a GP practice to convert its current legal structure as a partnership either to either a limited liability company or a limited liability partnership. These alternative legal structures are exempt from the requirements of the RCI, because they are separately required to be registered in the Register of Companies. There are, however, important advantages to a practice operating under these alternative legal structures, including individual partners not being liable for the borrowings of the practice.

2. the other way of avoiding registration with the RCI is to update the names of the partners in the Land Register, so that at all times the Land Register information is up to date.

If we can be of help, then please do get in touch.