Commissioner of State Revenue v Karingal 2 Holdings Pty Ltd, CPT Custodian Pty Ltd

The High Court of Australia considered an appeal by the Commissioner of State Revenue against a decision of the Victorian Court of Appeal in *Commissioner of State Revenue v Karingal 2 Holdings Pty Ltd, CPT Custodian Pty Ltd*. The dispute concerned the application of stamp duty to a transaction involving the transfer of units in a trust. Karingal 2 Holdings Pty Ltd and CPT Custodian Pty Ltd (the respondents) were the purchasers of units in the Karingal 2 Trust, and the Commissioner sought to assess stamp duty on the transfer of these units.

The central legal issue before the High Court was whether the transfer of units in the Karingal 2 Trust constituted a "dutiable transaction" under the *Stamps Act 1958* (Vic). Specifically, the court had to determine if the transaction fell within the definition of "dutiable property" and, if so, whether the transfer attracted stamp duty. The Commissioner argued that the transfer of units was a dutiable transaction, while the respondents contended it was not.

The High Court, by majority, allowed the Commissioner's appeal. The majority reasoned that the transfer of units in the trust was a transfer of an interest in dutiable property. They applied the principle that a unit in a unit trust represents a proportionate interest in the underlying assets of the trust. Therefore, the transfer of such a unit was considered a transfer of an interest in property, which, in this instance, was dutiable property. The court distinguished the present case from previous authorities where the nature of the trust assets was such that the transfer of units was not considered a transfer of an interest in dutiable property.

Consequently, the High Court ordered that the appeal be allowed, the decision of the Victorian Court of Appeal be set aside, and the matter be remitted to the Supreme Court of Victoria for further consideration in accordance with the High Court's judgment.