In an announcement on January 31, 2025, Finance said that it will defer the implementation date for the increase to January 1, 2026 (from June 25, 2024). As originally proposed in the 2024 federal budget, the capital gains inclusion rate was set to increase for corporations and trusts to 2/3 (from 1/2), and for individuals to 2/3 (from 1/2) on the portion of capital gains realized in the year that exceeded $250,000. Finance notes that this $250,000 threshold will now also be effective January 1, 2026. Conversely, the increase to the Lifetime Capital Gains Exemption to $1.25 million (from $1,016,836) on the sale of small business shares and farming and fishing property is proposed to be effective June 25, 2024. The Canadian Entrepreneurs' Incentive is proposed to take effect starting in 2025 and the maximum will increase by $400,000 each year, reaching $2 million in 2029.
Download this edition of the TaxNewsFlash to learn more.
