On January 31, 2025, the Government of Canada announced a deferral of the proposed increase to the capital gains inclusion rate. Originally set to take effect on June 25, 2024, the increase will now be postponed until January 1, 2026. Until then, 50% of capital gains will remain taxable.
While the inclusion rate change is delayed, the increase to the Lifetime Capital Gains Exemption (LCGE) will proceed as planned:
- Effective June 25, 2024, the LCGE for small business shares, farming, and fishing properties will rise to $1.25 million (up from $1,016,836 before June 25, 2024).
What Happens to Taxes Already Paid at the Higher Rate?
The CRA had been collecting tax at the anticipated 66.67% inclusion rate, despite the relevant legislation not yet being passed. This is standard practice from CRA; however, given the deferral, taxpayers who paid at the higher rate will likely have a mechanism to amend their filings or receive a tax credit for excess amounts paid. Specifics have not yet been released.
Will the Changes Ultimately Take Effect?
While the deferral pushes the tax increase to 2026, its future remains uncertain, especially with a potential shift in federal leadership.
As more details emerge, we will keep our clients informed on how these developments may impact their financial plans.
TPC Financial Celebrates B.C. Provincial Curling Champions!
We are thrilled to share that the women’s curling team we proudly sponsor has won the B.C. Provincial Championship and will represent British Columbia at this year’s Scotties Tournament of Hearts in Thunder Bay!
The team expressed their gratitude for the unwavering support from family, friends, and sponsors:
“We are incredibly honoured and excited to be representing B.C. at this year’s Scotties Tournament of Hearts in Thunder Bay! HUGE thank you to our sponsors who allow us to chase our dreams.”
Their journey is a testament to hard work, dedication, and teamwork. We couldn’t be more proud to support them as they pursue their passion.
Join us in cheering them on as they compete on the national stage!