Introduction
On 3 December 2025, the Full Court Federal Court handed down its
judgment in Commissioner of Taxation v Hicks
[2025] FCAFC 171.
The principal issue was whether a series of steps involving the
top-hatting of a unit trust followed by a selective share reduction
by the newly interposed company was a scheme to which p 45B (about
capital benefit schemes) or Part IVA (the general anti-avoidance
rule) of the Income Tax Assessment Act 1936
(ITAA 1936) applied.
The full court unanimously dismissed the appeal, agreeing with
the conclusions reached by Logan J at first instance
in Ierna v Commissioner of Taxation [2024] FCA
592 (Ierna). In doing so, the court made a number
of key observations concerning the ITAA 1936's anti-avoidance
provisions, including with respect to p 45B and the recently
decided Commissioner of Taxation v PepsiCo
Inc [2025] HCA 30 (PepsiCo).
