Page 310 - SAIT Compendium 2016 Volume1

First Schedule INCOME TAX ACT 58 OF 1962 First Schedule 11. If during any year of assessment livestock or produce—
(a) (b)
(c)
has been applied by the farmer for his private or domestic use or consumption;
has, for purposes other than that of the production to the farmer of income from sources within the Republic, been removed by him from the Republic; or
(i) has been donated by the farmer;
(ii) has been disposed of by the farmer, other than in the ordinary course of his farming operations, for a
consideration less than the market value thereof;
(iii) where the farmer is a company, has on or after 21 June 1993 been distributed in specie to a holder of a share of
such company; or
[Item (iii) substituted by s. 41 (1) of Act 53 of 1999 and by s. 78 (1) of Act 7 of 2010 and substituted by s. 109 of Act 31 of 2013 – date of commencement: 12 December 2013.]
(iv) has been applied by the farmer for any other purpose other than the disposal thereof in the ordinary course of his farming operations and under circumstances other than those contemplated in subparagraph (a) or (b) or item (i), (ii) or (iii) of this subparagraph,
there shall be included in the income of such farmer for that year of assessment—
(A) where such livestock or produce has been applied in a manner contemplated in subparagraph (a), an amount equal to
the cost price to him of such livestock or produce, or where the cost price cannot be readily determined, the market
value of such livestock or produce; or
(B) where such livestock or produce has been applied, disposed of or distributed in a manner contemplated in
subparagraph (b) or (c), an amount equal to the market value of such livestock or produce:
Provided that where—
(a) any livestock or produce so applied, is used or consumed by the farmer in the ordinary course of his farming
operations, the amount included in his income under this paragraph shall for the purposes of this Act be deemed to
be expenditure incurred in respect of the acquisition by him of such livestock or produce; or
(b) the provisions of subparagraph (c) (ii) are applicable and an amount of consideration as contemplated in such subparagraph has been received by or accrued to the farmer, the amount included in his income in terms of this
paragraph shall be reduced by such consideration.
[Para. 11 substituted by s. 42 of Act 101 of 1990, by s. 44 (1) of Act 113 of 1993 and by s. 32 of Act 36 of 1996.]
12. (1) Subject to the provisions of subparagraphs (2) to (6), inclusive, there shall be allowed as deductions in the determination of the taxable income derived by any farmer the expenditure incurred by him during the year of assessment in respect of—
(a) the eradication of noxious plants and alien invasive vegetation;
[Item (a) substituted by s. 57 (1) (a) of Act 60 of 2008.]
(b) the prevention of soil erosion;
(c) dipping tanks;
(d) dams, irrigation schemes, boreholes and pumping plants;
(e) fences;
(f) the erection of, or extensions, additions or improvements (other than repairs) to, buildings used in connection with
farming operations, other than those used for domestic purposes;
[Item (f) substituted by s. 27 (1) (b) of Act 96 of 1981 and by s. 57 (1) (b) of Act 60 of 2008.]
(g) the planting of trees, shrubs or perennial plants for the production of grapes or other fruit, nuts, tea, coffee, hops, sugar, vegetable oils or bres, and the establishment of any area used for the planting of such trees, shrubs or plants;
[Item (g) substituted by s. 27 of Act 55 of 1966.]
(h) the building of roads and bridges used in connection with farming operations;
(i) the carrying of electric power from the main transmission lines to the farm apparatus or under an agreement concluded with the Electricity Supply Commission in terms of which the farmer has undertaken to bear a portion of the cost incurred by the said Commission in connection with the supply of electric power consumed by the farmer wholly or mainly for farming purposes;
[Item (i) substituted by s. 28 (1) (a) of Act 91 of 1982.]
[Item (j) added by s. 24 (a) of Act 113 of 1977, substituted by s. 27 (1) (c) of Act 96 of 1981, amended by s. 39 of Act 90
of 1988 and deleted by s. 45 (a) of Act 113 of 1993.] [Sub-para. (1) amended by s. 27 (1) (a) of Act 96 of 1981.]
(1A) For purposes of this Schedule, expenditure incurred in respect of any matter contemplated in subparagraph (1) (a), (b), (d) or (e) to conserve and maintain land owned by the taxpayer shall be deemed to be expenditure incurred in the carrying on of pastoral, agricultural or other farming operations if—
(a) conservation and maintenance is carried out in terms of a biodiversity management agreement that has a duration of
at least ve years; and
(b) the agreement contemplated in item (a) is entered into by the taxpayer in terms of section 44 of the National
Environmental Management: Biodiversity Act, 2004 (Act 10 of 2004); and
(c) land utilised by the taxpayer for purposes of carrying on the pastoral, agricultural or other farming operations
consists or includes or is in the immediate proximity of the land that is the subject of the agreement contemplated
in item (a).
[Sub-para. (1A) inserted by s. 24 (b) of Act 113 of 1977, deleted by s. 45 (b) of Act 113 of 1993 and inserted by s. 57 (1)
(c) of Act 60 of 2008.]
(1B) (a) Where any asset in respect of which any deduction has been allowed to a farmer under the provisions of
subparagraph (1) or (1A) (whether in the current or any previous year of assessment) and which is or has become a movable 302 SAIT CompendIum oF TAx LegISLATIon VoLume 1
(j) . . .