This article reviews the High Court's decision in Commissioner of Taxation v. Helen Mary McNeil and examines the earlier decisions of both the Federal Court of Australia and the Full Court of the Federal Court of Australia. The ruling by the High Court of Australia has cast considerable uncertainty regarding the tax treatment of renounceable rights which are issued by a company to its shareholders. The High Court held that sell-back rights which are issued by a company to its shareholder amounted to income and was taxable in the hands of the shareholder. The McNeil case is compared and contrasted with the ECJ decision in Kretztechnik AG.