ATO Interpretative Decision

ATO ID 2001/206

Income Tax

• This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Issue

Are monies received by the taxpayer for an exclusive media interview assessable income under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997).

Decision

Yes. The monies received by the taxpayer for an exclusive media interview are assessable under section 6-5 of the ITAA 1997, being income under ordinary concepts.

Facts

The taxpayer receives a large sum of money for an exclusive media interview of a life story. An agreement is signed by the taxpayer prior to the interview regarding times of availability for interview, sum of money to be paid, timing of payment, etc. All rights, title and interest, including copyright in the interview are owned exclusively by the media channel.

Reasons for Decision

Under section 6-5 of the ITAA 1997, assessable income includes income according to ordinary concepts. The legislation, however, does not define the expression "income according to ordinary concepts".

The courts too, have declined to give the expression of a definitive meaning, through various general indicators of what constitutes income can be identified from case law. These include whether or not payment was:

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part of a periodic receipt of payments or otherwise connected to the receipt of such payments;

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a reward for the provision of personal services; and,

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for services that were rendered for the reasons of receiving payment.

The presence or absence of any single indicator is not necessarily determinative as to whether or not a particular receipt is income.

Payments received from giving a media interview, may or may not be assessable, depending upon the facts of the particular case. Given the facts as above, however, the payment is income. Particularly relevant are the following:

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the quantum of the payment is significant - it is not merely a nominal amount to cover the taxpayer's costs or inconvenience;

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the taxpayer needs to provide a service in order to receive the payment (ie must give the interview); and,

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the taxpayer is motivated to provide the service by the receipt of the payment (as evidenced by the negotiation that took place over the payment and the fact that the interview was not spontaneous but was planned and organised in advance).

Support for treating the payment as income can be found in the case of Brent v. FC of T 71 ATC 4195; (1971) 125 CLR 418; (1971) 45 ALJR 557; 2 ATR 563 (Brent's case). In that case, the wife of the great train robber, Ronald Biggs, was held to have derived assessable income when she received monies for telling her life story to a newspaper for its exclusive publication.

Other cases in which it was held that similar payments were for services rendered, and as such constituted assessable income include:

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Hobbs v. Hussey (1942) 24 TC 153 where the taxpayer, who had apparently been a notorious criminal, received a sum of £1500 for the serial rights to his autobiography which was to be published in twelve newspaper articles; and

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Housden (Inspector of Taxes) v. Marshall (1958) 3 All ER 639 where the taxpayer agreed to make available his experiences as a jockey, including photographs and newspaper cuttings.

Accordingly, in the taxpayer's case the information given as a result of the exclusive interview is income earned for providing personal services and is income under ordinary concepts and assessable under section 6-5 of the ITAA 1997.

Legislative References:
Income Tax Assessment Act 1997
   Subsection 6-5(1)
   Subsection 6-5(2)

Case References:
Brent v. Federal Commissioner of Taxation
   71 ATC 4195
   (1971) 125 CLR 418
   (1971) 45 ALJR 557
   2 ATR 563

Keywords
Lump sum payments
Personal services income
Arts, media & entertainment sector

Business Line:  Small Business/Individual Taxpayers

Date of publication:  15 August 2001

ISSN: 1445-2782