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 Full Federal Court, which had affirmed a decision of the Administrative Appeals Tribunal. The dispute concerned the assessment of stamp duty on a transaction involving the transfer of units in a trust. The Commissioner of State Revenue (the Commissioner) had assessed stamp duty on the basis that the transaction constituted a dutiable 'conveyance' or 'transfer' of dutiable property. The taxpayer contended that the transaction was not dutiable, arguing that it did not involve a transfer of legal or beneficial ownership of the trust property.

The High Court was required to determine whether the transaction, which involved the transfer of units in a unit trust, constituted a dutiable 'conveyance' or 'transfer' of dutiable property for the purposes of the relevant State stamp duty legislation. Specifically, the Court had to consider whether the transfer of units in a trust amounted to a transfer of the underlying assets of the trust, or whether it was merely a transfer of a chose in action.

The Court, by majority, held that the transfer of units in a unit trust did not constitute a dutiable conveyance or transfer of the trust property itself. The majority reasoned that the rights of a unit holder are personal rights against the trustee, not proprietary rights in the trust assets. Therefore, the transfer of units was a transfer of a chose in action, which was not dutiable under the relevant legislation. The Court distinguished this from situations where a trust was a mere sham or where the trustee held property on bare trust for the unit holders, in which case a transfer of units might be treated as a transfer of the underlying property.

The appeal was allowed, and the assessment of stamp duty was set aside.