Q. Britney provides some extra help to Tame Antelope in lining up music performances to market their soon-to-be-released record. Britney gives an invoice to Tame Antelope for $1,000 to cover her time in arranging performances for the band. On 1 June 2022, the lead singer of Tame Antelope wrote to Britney to express his heartfelt thanks for all the help Britney had given the band. The lead singer enclosed a cheque for $1,000 in respect of the invoice and a gold necklace worth $5,000 which the lead singer begged Britney to accept as a token of the band's affection and esteem.

Is the $1,000 cheque considered income? If so, what type of income? Is the $5,000 gold necklace considered income? Is this taxable? Is it a gift exempt from tax? Explain with reference to the ITAA.

Am I correct in saying that the necklace was an unsolicited gift and is not ordinary income because it's not something she receives on a regular basis, nor is it taxable? Scott v FCT[1] held that "an unsolicited gift does not... become part of the income of the recipient merely because generosity was inspired by the goodwill and the goodwill can be traced to gratitude engendered by some service rendered. It needs to be established that the gift didn't have a connection to the services performed by the recipient."

Or does this mean that because the gift was given because of all the work she had done for the band, that it is taxable? The necklace is a capital asset and she will only have to pay tax on any profits she makes when she sells it - is the right?

Is it correct to say that the $1,000 cheque is assessable income because Britney received it as remuneration for her personal services to the band and is taxable. Am I on the right track here?

[1] Scott v Federal Commissioner of Taxation; [1966] HCA 48