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).
(2)
(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 five 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:
Provided that any excess farming profits derived by the taxpayer in any of the said periods of assessment shall not be taken into account in the determination of such annual average taxable income: Provided further that in the case of the estate of an insolvent person any farming operations carried on by such person prior to insolvency, any income derived by him from such operations and any deductions allowable against such income under this Act shall, so far as such estate is concerned, be deemed for the purposes of this item to be respectively operations, income or deductions of such estate, and the annual average taxable income derived by such estate from farming shall be determined accordingly; or
[Item (a) substituted by section 32 of Act 69 of 1975, amended by section 34 of Act 21 of 1995, substituted by section 81 of Act 25 of 2015 effective on 8 January 2016]
(b) where the taxpayer is a person referred to in subparagraph (5)(a) and did not carry on farming operations before the commencement of the relevant period, an amount equal to two-thirds of such taxable income.
(3) Where the taxpayer’s assessment for a relevant period has in terms of section 100 of the Tax Administration Act, become final and conclusive, the Commissioner shall not, merely by reason of the fact that the amount determined under subparagraph (2)(a), as the taxpayer’s annual average taxable income from farming in relation to such period is incorrect, be required to make a further assessment upon the taxpayer for such period in terms of section 99 of that Act or to authorize a refund under section 190 of that Act of any tax overpaid in respect of such period, unless it appears that such annual average taxable income from farming should be increased or reduced by at least six hundred rand.
(4) In determining under this paragraph any amount of normal tax which is or would be chargeable no regard shall be had to the deductions provided for in section 6 of this Act, and nothing in this paragraph contained shall be construed as relieving any person from liability for taxation under this Act upon any portion of that person’s taxable income.
(5) Any person –
(a) who is a natural person and whose taxable income for any period of assessment consists of or includes taxable income derived from farming operations carried on by him for his own benefit or by his spouse for such spouse’s own benefit; or
(b) who is the executor of the estate of any deceased person or the trustee of the insolvent estate of a natural person and who in his capacity as such has during the period of assessment commencing immediately after the death or insolvency of the said person continued farming operations commenced by such deceased or insolvent person prior to his death or insolvency,
may, within three months after the end of such period of assessment or within such further time as the Commissioner may approve and in such form as the Commissioner may prescribe, elect that the normal tax chargeable in respect of his taxable income if item (a) is applicable or the taxable income of such estate if item (b) is applicable, be determined as provided in subparagraph (1), and such election shall be binding upon such natural person or estate, as the case may be, in respect of the said period of assessment and every succeeding period of assessment: Provided that –
(i) no election may be made under this subparagraph by any person in respect of any period of assessment referred to in item (a) if during such period such person was married and such person’s income for such period is in terms of section 7(2) of this Act deemed to be income accrued to such person’s spouse;
(ii) where an election has been made by such person in respect of any period of assessment referred to in item (a) and such person’s income for any succeeding period of assessment is in terms of section 7(2) of this Act deemed to be income accrued to such person’s spouse, such election shall, with effect from such succeeding period, cease to have any force or effect.