Page 314 - SAIT Compendium 2016 Volume1

First Schedule INCOME TAX ACT 58 OF 1962 First Schedule
(ii) the aggregate of the deductions allowed in terms of this item or the corresponding provisions of the Income Tax Act, 1941, or by virtue of any other provision of the last-mentioned Act or the Income Tax Act, 1925 (Act 40 of 1925), in respect of plantations shall not exceed the amount of such expenditure or such cost of acquisition.
(2) For the purpose of calculating the cost of acquisition of any plantation the provisions of subparagraph (2) of paragraph 14 shall apply mutatis mutandis in the case of any plantation acquired by any farmer with the land on which it is growing.
(3) If in any year of assessment the income of any farmer other than a company includes income derived from the disposal of plantations or forest produce and the taxable income derived by him in that year from the disposal of plantations and forest produce (determined as though the income derived by him from that source were his only income) exceeds the annual average taxable income derived by him from that source (as so determined) over the three years of assessment immediately preceding the said year of assessment, the normal tax chargeable in the case of such farmer for the said year of assessment shall, subject to the provisions of section 5 of this Act, be determined in accordance with the provisions of subsection (10) of that section: Provided that—
(i) the provisions of this subparagraph shall not apply unless the disposal of plantations or forest produce forms part of the normal farming operations of the farmer concerned;
[Item (i) substituted by s. 47 of Act 113 of 1993.]
(ii) for the purposes of this subparagraph, where the farmer has in respect of any of the aforesaid years of assessment derived any excess plantation farming pro ts determined under paragraph 20 (3) (g) such excess plantation farming pro ts shall—
(aa) where such excess plantation farming pro ts have been derived during the rst-mentioned year of assessment,
be excluded from the farmer’s taxable income derived in that year from the disposal of plantations and forest
produce;
(bb) where such excess plantation farming pro ts have been derived during any of the aforesaid three years of
assessment, not be taken into account in the determination of the aforesaid average taxable income derived by
the farmer over those years;
(iii) the Commissioner’s determination as to what portion of a farmer’s taxable income is derived from the disposal of
plantations and forest produce shall be nal;
(iv) nothing in this paragraph contained shall be construed as relieving any farmer from liability for taxation under this
Act upon any portion of his taxable income;
(v) the provisions of this subparagraph shall not apply if the normal tax chargeable in the case of such farmer in respect
of the rst-mentioned year of assessment is required to be determined under the provisions of paragraph 19.
[Sub-para. (3) substituted by s. 25 of Act 88 of 1965, by s. 26 of Act 95 of 1967, by s. 31 (1) of Act 88 of 1971 and by s. 30 (1) of Act 69 of 1975.]
16. For the purposes of paragraphs 14, 15 and 20—
‘plantation’ means any arti cially established tree as ordinarily understood (not being a tree of the nature described in paragraph 12 (1) (g) or any forest of such trees and includes any natural extension of such trees;
‘forest produce’ means trees (other than trees of the nature described in paragraph 12 (1) (g)) and anything derived from such trees, including timber, wood, bark, leaves, seeds, gum, resin and sap.
[Para. 16 substituted by s. 28 of Act 55 of 1966 and amended by s. 31 (1) of Act 69 of 1975.]
17. Where the sugar cane elds of any farmer other than a company have been damaged by re and the taxable income of such farmer for any year of assessment includes taxable income derived from the disposal of sugar cane as a result of such re which but for such re would not have been derived by him in such year, the normal tax chargeable in the case of such farmer in respect of such year shall, subject to the provisions of section 5 of this Act, be determined in accordance with the provisions of subsection (10) of that section, but nothing in this paragraph contained shall be construed as relieving such farmer from liability for taxation under this Act upon any portion of his taxable income: Provided that the provisions of this paragraph shall not apply if the normal tax chargeable in the case of such farmer in respect of the said year of assessment is required to be determined under the provisions of paragraph 19.
[Para. 17 substituted by s. 26 of Act 88 of 1965, by s. 27 of Act 95 of 1967 and by s. 32 (1) of Act 88 of 1971 and amended by s. 41 of Act 129 of 1991.]
18. . . .
[Para. 18 deleted by s. 33 of Act 36 of 1996.]
19. (1) If any taxpayer has made an election as provided in subparagraph (5) which is binding upon him in respect of any period of assessment (hereinafter referred to as the relevant period) during which he or his spouse has carried on farming operations or has derived income from farming operations, and his taxable income derived during the relevant period from farming exceeds his average taxable income from farming as determined in relation to the relevant period in accordance with subparagraph (2), the normal tax chargeable in respect of his taxable income for the relevant period shall, subject to the provisions of section 5 of this Act, be determined in accordance with section 5 (10).
[Sub-para. (1) substituted by s. 33 (a) of Act 88 of 1971 and by s. 22 of Act 90 of 1972, amended by s. 32 (1) (a) of Act 69 of 1975, by s. 30 of Act 103 of 1976 and by s. 16 of Act 104 of 1979, substituted by s. 25 of Act 104 of 1980, amended by s. 29 (1) of Act 91 of 1982 and substituted by s. 45 (a) of Act 94 of 1983 and by s. 34 (a) of Act 21 of 1995.]
(2) For the purposes of subparagraph (1) the taxpayer’s average taxable income from farming in relation to the relevant period shall be deemed to be—
(a)
where the taxpayer or his spouse carried on farming operations before the commencement of the relevant period, such amount as represents the taxpayer’s annual average taxable income (if any) from farming in respect of the periods of assessment—
(aa) for which the taxpayer was assessable under this Act and which fall within the period of ve years ending on
the last day of the relevant period; and
(bb) during which such farming operations were carried on or farming income was derived by the taxpayer:
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SAIT CompendIum oF TAx LegISLATIon VoLume 1