20A.    Provisions relating to farming development expenditure

(1)     Despite the provisions of paragraph 20(3)(a), where a person carrying on pastoral, agricultural or other farming operations as contemplated in section 26, incurred expenditure in respect of the matters referred to in items (c) to (i) of paragraph 12(1) of the First Schedule (referred to in this paragraph as ‘capital development expenditure’) and that person-

(a)     ceased to carry on such pastoral, agricultural or other farming operations during any year of assessment; and

(b)     at any time thereafter disposes of immovable property on which those operations were carried on,

that person may elect that the amount of the capital development expenditure, or part thereof, which is carried forward and deemed in terms of paragraph 12(3) of the First Schedule to be expenditure which has been incurred in the next succeeding year of assessment for purposes of paragraph 12(1) of the First Schedule (as reduced in terms of paragraph 12(3B) of the First Schedule, if applicable), must be treated as expenditure incurred in respect of that immovable property for the purposes of this Part.

[Subparagraph (1) amended by section 48 of Act 23 of 2020]

 

(2)     The amount of the capital development expenditure in respect of which the election may be made in terms of subparagraph (1) may not exceed ed the proceeds from the disposal of that immovable property contemplated in subparagraph (1), reduced by-

(a)     in the case of a pre-valuation date asset, any other amount allowable in terms of paragraph 25; or

(b)     in any other case, an amount allowable in terms of paragraph 20.

(3)     Where a person adopts or determines the market value of immovable property on which pastoral, agricultural or other farming operations were carried on as the valuation date value of that asset in terms of paragraph 29(4), only capital development expenditure incurred by that person on or after 1 October 2001 must be taken into account for the purpose of calculating the amount in respect of which an election can be made in terms of subparagraph (1).