Trust Company of Australia v Commissioner of State Revenue

The High Court of Australia considered an appeal by the Trust Company of Australia Limited (the taxpayer) against a decision of the Supreme Court of Victoria, which had upheld an assessment by the Commissioner of State Revenue (the Commissioner) for Victorian stamp duty. The dispute concerned the application of stamp duty to a transaction involving the transfer of units in a trust. The taxpayer argued that the transaction was exempt from stamp duty under a specific provision of the *Stamps Act 1958* (Vic) relating to the transfer of dutiable property where the consideration for the transfer was less than $20,000. The Commissioner contended that the transaction was not exempt because the true consideration, when properly assessed, exceeded this threshold.

The central legal issue before the High Court was whether the consideration for the transfer of units in the trust was to be determined by reference to the face value of the units or by reference to the underlying value of the trust's assets. Specifically, the court had to determine how to interpret and apply section 17(1)(a) of the *Stamps Act 1958* (Vic), which provided an exemption for transfers of dutiable property where the consideration was less than $20,000, and whether the "consideration" for the transfer of units in a unit trust should be assessed by reference to the market value of the units themselves or the value of the underlying assets of the trust.

The High Court, by majority, held that the consideration for the transfer of units in a unit trust is the value of the units themselves, not the value of the underlying assets of the trust. The court reasoned that the transfer of units represents a transfer of a proprietary interest in the trust, and the value of that interest is determined by the market value of the units. The exemption in section 17(1)(a) of the *Stamps Act 1958* (Vic) applies to the consideration paid for the units, not the value of the assets held by the trust. Therefore, the court found that the taxpayer had correctly assessed the consideration for the transfer of the units as being less than $20,000.

The appeal was allowed, and the assessment by the Commissioner was set aside.