Scottish Saudi-based worker has Shetland council tax dispute over second home status remitted to First-tier Tribunal

About this case:

• Citation:
  2025UT30
• Judgment:
  External link
• Court:
  Upper Tribunal for Scotland
• Judge:
  Sheriff McCartney

A second home levy of £2,048.49 was imposed on Mr A, the appellant, by Shetland Islands Council for the council tax year 2024/25, after it concluded his main residence was elsewhere. On appeal he contended that the FTS had reached a decision no reasonable tribunal could reach and unfairly taken into account information provided to it after the hearing.

The appeal was heard by Sheriff Frances McCartney of the Upper Tribunal. Both parties agreed to the appeal being dealt with on the papers.

Test for residence

The appellant and his wife lived at a different property in Shetland until 2002, when they moved to the mainland. From 2007 onwards he began to work abroad but always maintained a property in Scotland, although it was a condition of his employment that he lived in a property in Saudi Arabia. In November 2019 the appellant and his wife bought Spindrift House in Whiteness, which they intended to become their family home in due course.

In March 2024, the appellant and his wife were told that a 100 per cent council tax levy would be applied to Spindrift House as the council considered the property to be their second home. The council had taken the decision in April 2024 to apply additional council tax on second homes under the Council Tax (Variation for Unoccupied Dwellings) (Scotland) Regulations 2013. After the council rejected a grievance lodged by the appellant, he appealed to the First-tier Tribunal for Scotland’s Local Taxation Chamber against the determination.

Following a hearing conducted by Webex, the FTS applied the test for main residence from the English case of R v Horsham (2004) and concluded that the appellant’s main residence was not the Shetland property as he spent most of his time abroad. On appeal, the appellant submitted that the FTS erred in applying the test to the facts of his case and in accepting a post-hearing submission from the respondent.

Clear understanding

In her decision on the first ground of appeal, Sheriff McCartney said: “There is no merit in this ground. I am satisfied from the submissions before the UTS and from the FTS decision that what was submitted is nothing more than a written copy of the statement read out by [council witness] Ms Johnston at the FTS hearing. The FTS decision makes it clear the document did not contain any new points but, in any event, the FTS relied on the oral evidence of Ms Johnston. The appellant has not been prejudiced in any way. This ground of appeal is refused.”

Turning to the second ground of appeal, Sheriff McCartney began by noting: “Both parties appear to have set out an extensive factual basis for why Mr A does or does not have his main home in Shetland. Some of those submissions referred to legal matters, but in the main the submissions were on the factual position as to the property. The findings in fact do not help to explain what facts the FTS found. Other than a brief sentence in its reasons section referring to Mr A’s evidence of working abroad, it has not set out the factual basis as to what material facts it is relying upon in reaching its decision.”

She continued: “As indicated, the question of whether a property is a main or sole residence is fact sensitive. It requires the decision maker to have a clear understanding of the relevant facts. In a case such as this, that will include matters such as periods of time which Mr A and his family reside at the property in Shetland over an annual period, or perhaps over a number of years (although it is not simply a test as to which property more time is spent at) [and] the nature of their ties to each property that is in Shetland and abroad.”

Considering the factual disputes between the parties, Sheriff McCartney said: “There is an argument that it is not just a question of time spent at each property. The FTS may wish to see documentation from both parties to verify their position and make appropriate case management directions as to what facts can be agreed, and what documentation should be lodged to allow other facts to be agreed or to assist to be proved. If Mr A wishes to rely upon the facts (or case law that might assist), he must put those squarely before the FTS. There is, for example, a dispute as to how many days of the year the appellant and his family are in occupation at the property in Shetland.”

She concluded: “Despite having made comment on the permission to appeal decision by the FTS, I nonetheless grant this appeal. The ground for doing so is that the FTS have not made sufficient findings in fact on the surrounding circumstances as to the use of the property to then be able to apply the reasonable onlooker test. The appeal is upheld, and a further hearing is required before the FTS.”

The case was therefore remitted to a freshly constituted tribunal hearing for further procedure.