After discussing this in a chat and debugged the issue, it turned out that the required directive
PermitTunnel yes was not in place and active. After adding the directive to
/etc/ssh/sshd_config and reloading sshd by
service sshd reload this was resolved.
-v to the ssh command to get some debugging information and from that we found:
debug1: forking to background
root@ubuntu:~# debug1: Entering interactive session.
debug1: Remote: Server has rejected tunnel device forwarding
channel 0: open failed: administratively prohibited: open failed
debug1: channel 0: free: tun, nchannels 1
The server actively rejected the tunnel request which pointed us to the right directive.