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A taxing question

By D

Macattram v Camden London Borough Council (2012) QBD (Admin)
On Lawtel but no on BAILII

This is an interesting little problem involving the payment of Council Tax. The landlord had rented the property to the Council. They had used it to house homeless people. The property was rented for a fixed term of three years and at the end of this all the occupiers had left. However, the Council declined to return the property and continued to pay rent. It was accepted by all parties that a periodic tenancy arose at this point. The local authority then stopped paying the rent and sought to surrender their interest by mailing the keys to the landlord.

Rather sneakily, they then sought to charge the landlord Council Tax for the time during which the periodic tenancy subsisted. The landlord contested liability before the Valuation Tribunal and then appealed against their decision to the High Court.

The issue in the case was the correct interpretation of s6 Local Government Finance Act 1992. This section sets out who is liable to pay council tax. Subsection 2 has a hierarchical list of who is liable to pay council tax. When considering liability the correct action is to work down the list seeking to identify a person in that bracket and the person identified first is the one liable to pay the tax. This list includes residents with a leasehold interest near the top but at the bottom is an entry stating that the “owner” is liable. This is a final catch all as “owner” is defined in subsection 5 as a person having a material interest in the premises. Subsection 6 sets out that a material interest is a freehold interest or a leasehold interest granted for a term of six months or more.

The landlord argued that the original tenancy had been granted for three years, making the local authority liable for council tax. The periodic tenancy was a tenancy which arose from the fixed term and should be annexed to the main tenancy and each succeeding period of the periodic tenancy was art of the original term granted. This meant that the council remained liable for council tax. Finally, the posting of the keys had not acted as a surrender.

The High Court endorsed the findings of the Valuation Tribunal. The surrender was effective because the landlord had accepted it by her conduct. A point that the tribunal had considered and taken evidence on. In any event, it was not the case that the fixed term and periodic tenancies could be joined together in this fashion. This was something that should not be permitted easily as it undermined the wording of the Act. The parties conduct pointed to the periodic tenancy being not a continuation of the original tenancy but actually the grant of a new monthly periodic tenancy. Therefore at the time the new periodic tenancy was granted the obligation to pay council tax would have reverted to the landlord as the council would not have had a material interest. The Court disliked the idea of the liability switching back and forth depending on the length of the periodic tenancy and refused to accept that the successive periods of the periodic tenancy should be aggregated together to determine the size of the interest. If the periods had been six monthly then a different decision might have been made. However, that had not happened in this case.

Accordingly the appeal was dismissed.

This is an interesting case which should serve as a warning for anyone letting to a council. It would apply equally to any case where a tenant let a property on a periodic basis but was not if fact resident there and where no other person was liable to council tax. A number of businesses in London rent properties from landlords and sub-let them for holidays and the like. In these cases this decision might also be relevant.

D is a solicitor specialising in landlord and tenant matters with a London firm.


  1. Adrian Thompson


    If there is any possibility of a transcript that would be really useful. I did a case not so long ago (only VT so this overrules) which gave precisely the opposite decision. It will be interesting to see if there are differences to distinguish the cases. The case we took was Oyston v Leeds City Council – Valuation Tribunal for England – 4720M67692/244C

    You can see details here if you are interested and in particular you will note the periodic was a “continuation” of the fixed term:

    Many thanks


    • David Smith

      We only have the abbreviated Lawtel report at this stage, sorry. If anyone can offer more detail we would be grateful.

  2. Douglas Johnson

    It would seem unusual if the Court held that a monthly periodic tenancy became a “freehold interest or a leasehold interest which was granted for a term of six months or more” (the test in LGFA 1992) simply because 6 months had passed.

    • Adrian Thompson


      I have to say I favour the case that we took and successfully argued that the periodic was a “continuation” of the fixed term. Also, the test looks for – “was” granted for a term of 6 months or more, not “is” (i.e. looking for what happened in the past, not what the current situation of the tenancy is).

      I will keep trying to get hold of the judgment.

      Many thanks


  3. David

    I agree with Douglas, I was surprised by that one.

    Adrian, the main differentiating factor I can think of was that being a contractual tenancy (tenant not an individual) there was no statutory periodic run on.

  4. S

    Land law academics up and down the land will be tearing their hair out in relation to this one.

    I quote from Gray’s Elements of Land Law:

    “Unbroken elongating term
    4.1.54 The doctrinal embarrasmsment is heightened by the classical theory that, in the absence of a valid notice to quit, a periodic tenancy takes effect, not as an aggregation of distinct terms, but as a single, infinitely expandable, term. The units of time which constitute the periodic tenancy are seen as comprising (at least retrospectively) one single unbroken term: Hammersmith LBC v Monk [1992] 1 AC 478 …”

    So I’d hazard a guess that none of that was cited to High Court judge and so the decision is per incuriam.

    • Romain

      This suggests that a periodic tenancy is to be considered to constitute a single term a posteriori while the test here is that the interest must be granted for a term of 6 months or more at the onset, which is clearly not the case in a periodic tenancy with a shorter period.


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