Commissioner of Stamps (Qld) v Counsell

The Commissioner of Stamps (Queensland) appealed to the High Court of Australia against a decision of the Supreme Court of Queensland concerning the imposition of gift duty. The dispute arose from an indenture executed by Charles Frederick Counsell, a Queensland domiciliary, which declared him a trustee of certain assets, including Commonwealth inscribed stock, for his children. The Commissioner assessed gift duty on this transaction under Queensland's Gift Duty Act 1926. The Supreme Court had held that the Commonwealth inscribed stock was exempt from duty due to section 52A of the Commonwealth Inscribed Stock Act 1911-1918, but that duty was payable on other assets.

The High Court was required to determine two principal legal issues: first, whether the indenture creating a trust of Commonwealth inscribed stock constituted a "transfer of stock" within the meaning of section 52A of the Commonwealth Inscribed Stock Act 1911-1918, thereby exempting it from State gift duty; and second, whether the Queensland Parliament had the constitutional power to impose gift duty on personal property situated outside Queensland, where the donor was domiciled in Queensland.

On the first issue, the Court reasoned that the indenture, which created an equitable interest in the stock but did not effect a legal transfer, did not fall within the definition of "transfer of stock" as contemplated by section 52A of the Commonwealth Inscribed Stock Act. The Court followed its prior decision in *Fairbairn v. Comptroller of Stamps (Vict.)*, holding that the term "transfer of stock" in the relevant section referred to a legal transfer and not merely an equitable one. Consequently, the Commonwealth inscribed stock was not exempt from Queensland gift duty. Regarding the second issue, the Court held that domicile within Queensland provided a sufficient connection to the State to enable its legislature to impose tax on personal property situated outside its borders. This principle, established in cases concerning death duties, was applied to gift duty, affirming the validity of section 3 of the Gift Duty Act 1926 (Q.) in taxing such property.

The High Court allowed the appeal concerning the Commonwealth inscribed stock, finding it liable for gift duty. The cross-appeal regarding the validity of the duty on other out-of-State property was dismissed. Accordingly, the judgment of the Supreme Court of Queensland was varied to dismiss the respondent's appeal to that court and affirm the Commissioner's assessment. No order was made as to the costs of the appeal or cross-appeal to the High Court.