Permanent Trustee Australia Ltd v Commissioner of State Revenue

Permanent Trustee Australia Ltd (the taxpayer) appealed to the High Court of Australia against a decision of the Supreme Court of New South Wales, which had affirmed a determination by the Commissioner of State Revenue (the Commissioner). The dispute concerned the assessment of stamp duty on a transaction involving the transfer of units in a unit trust. The taxpayer argued that the transfer was exempt from stamp duty under a specific provision of the *Stamp Duties Act 1920* (NSW).

The central legal issue before the High Court was whether the transfer of units in the unit trust constituted a "dutiable transaction" for the purposes of the *Stamp Duties Act 1920* (NSW), and if so, whether any exemption applied. Specifically, the court had to determine if the transaction fell within the definition of a dutiable transaction and, if it did, whether it met the criteria for exemption as a transfer of dutiable property where the consideration was not paid or given by the transferee.

The High Court, in allowing the appeal, reasoned that the transaction did not constitute a dutiable transaction as defined by the Act. Gleeson CJ and Gummow J held that the transfer of units in the trust did not involve the transfer of dutiable property in the manner contemplated by the legislation. Their Honours clarified that the nature of a unit trust meant that the unitholders did not hold legal or beneficial title to the trust property itself, but rather a chose in action. Consequently, the transfer of units did not involve the transfer of the underlying trust assets, and therefore, the transaction was not subject to stamp duty. The court found that the Supreme Court had erred in its interpretation of the relevant provisions of the *Stamp Duties Act 1920* (NSW).

The High Court ordered that the appeal be allowed, the decision of the Supreme Court of New South Wales be set aside, and that the matter be remitted to the Supreme Court for determination of the stamp duty assessment in accordance with the High Court's judgment.