Reclaiming Motion in the cause Heptagon Portfolio Arbroath Limited against Angus Council
| Jurisdiction | Scotland |
| Court | Court of Session |
| Judge | Lord Matthews,Lord Armstrong,Lord Clark |
| Judgment Date | 01 May 2026 |
| Neutral Citation | [2026] CSIH 22 |
| Date | 01 May 2026 |
| Published date | 01 May 2026 |
| Docket Number | P894/24 |
EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
[2026] CSIH 22
P894/24
Lord Matthews
Lord Armstrong
Lord Clark
OPINION OF THE COURT
delivered by LORD CLARK
in the reclaiming motion
in the cause
HEPTAGON PORTFOLIO ARBROATH LIMITED
Petitioner and Reclaimer
against
ANGUS COUNCIL
Respondent
Petitioner and Reclaimer: D Thomson KC, Tosh; Addleshaw Goddard LLP
Respondent: Upton; Anderson Strathern LLP
1 May 2026
Introduction
[1] The petitioner and reclaimer, Heptagon Portfolio Arbroath Limited, was the owner
of a shopping centre in Arbroath, called the Abbeygate Centre. The shopping centre
contains a number of units. After several of these units had become unoccupied, Heptagon
let them out to Room for Faith Limited, which in turn sub-let the premises to Local Faith
Limited. Heptagon’s rental charge was £1 per annum for each unit.
2
[2] Section 16 of the Valuation and Rating (Scotland) Act 1956 provides that the occupier
of a non-domestic property, rather than the owner, is liable to pay non-domestic rates to the
local authority. However, where the property is unoccupied, section 24ZA of the Local
Government (Scotland) Act 1966 provides that the owner shall be liable for the non-domestic
rates. As a result of letting the units out, the liability for payment of non-domestic rates is
said to have passed from Heptagon to the tenant, Room for Faith Limited and then to the
sub-tenant, Local Faith Limited. The tenant and sub-tenant are said to benefit from the
exemption from liability for non-domestic rates for premises which are used for worship,
under section 22 of the 1956 Act. As a consequence, there is, according to this argument, no
payment to the local authority of non-domestic rates for these units.
[3] The respondent, Angus Council, considered that the leases between Heptagon and
Room for Faith were an artificial non-domestic rates avoidance arrangement. Put shortly,
the council’s view was that the leases had no commercial substance or purpose other than to
displace Heptagon’s liability for non-domestic rates. In accordance with Regulation 4 of the
Non-Domestic Rates (Miscellaneous Anti-Avoidance Measures) (Scotland) Regulations 2023,
on 22 November 2023 the council advised Heptagon that they intended to treat the company
as liable to pay non-domestic rates for the premises from 22 December 2023. Heptagon
appealed against that decision and on 4 July 2024 the Non-Domestic Rates Appeal
Sub-Committee of the council’s Policy and Resources Committee refused the appeal.
Heptagon brought a petition for judicial review of the council’s decision. The
Lord Ordinary, in his Opinion dated 12 August 2025, refused the petition and Heptagon
now reclaim (appeal) against that decision.
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