2.      Every farmer shall include in his return rendered for income tax purposes the value of all livestock or produce held and not disposed of by him at the beginning and the end of each year of assessment.

1.     In this Schedule –

14.

(1)     Any amount received by or accrued to a farmer in respect of the disposal of any  plantation shall, whether such plantation is disposed of separately or with the land on which it is growing, be deemed not to be a receipt or accrual of a capital nature and shall form part of such farmer’s gross income.

(2)     Where any plantation is disposed of by a farmer with the land on which it is growing the amount to be included in such farmer’s gross income in terms of sub–paragraph (1) shall –

(a)     if the amount representing the consideration payable in respect of the disposal of the plantation is agreed to between the parties to the transaction, be the amount so agreed to; or

(b)     failing such agreement, be such portion of the consideration payable in respect of the disposal of the land and the plantation as represents the consideration payable for the plantation.

[Item (b) substituted by section 80 of Act 25 of 2015 effective on 8 January 2015]

15.

 

(1)     In the determination of the taxable income of any farmer there shall be allowed as a deduction –

 

(a)     any expenditure incurred by such farmer during the year of assessment in respect of the establishment and maintenance of plantations;

 

(b)     any expenditure incurred by such farmer prior to the first day of July, 1948, in respect of the establishment and maintenance of any plantation or the cost of acquisition of any plantation purchased by such farmer whether before or after the first day of July, 1948: Provided that –

  

(i)      any deductions allowed under this item in respect of any plantation shall not in respect of any year of assessment exceed the gross income derived by such farmer in that year from the said plantation;

  

(ii)     the aggregate of the deduction allowed in terms of this item or the corresponding provisions of the Income Tax Act, 1941, or by virtue of any other provisions of the last-mentioned Act or the Income Tax Act, 1925 (Act No. 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;

 

(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 profits determined under paragraph 20(3)(g) such excess plantation farming profits shall –

 

(aa)    where such excess plantation farming profits have been derived during the first-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 profits 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 final;

 

(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 first–mentioned year of assessment is required to be determined under the provisions of paragraph 19.

(a)     a reference to a year of assessment shall in the case of any taxpayer who has under the provisions of section 66(13A) of this Act been permitted to furnish accounts in respect of the income derived by him from pastoral, agricultural or other farming operations made up to a date other than the last day of the relevant year of assessment, be construed as a reference to the period covered by such accounts; and

 

(b)     a reference to the end of a year of assessment includes, where the period assessed ends on a date other than the last day of the year of assessment, a reference to the end of that period.

16.    For the purposes of paragraphs 14, 15 and 20 –