Close
An overview by Borden Ladner Gervais, Taxand Canada
The Canadian government has recently announced a deferral of the planned increase to the capital gains inclusion rate, now set to take effect on 1 January 2026. Originally scheduled for 25 June 2024, the increase would raise the inclusion rate from 50% to 66.67% on capital gains above $250,000 for individuals, and on all capital gains for corporations and most trusts. The increase in the Lifetime Capital Gains Exemption and the Canadian Entrepreneurs’ Incentive remain unchanged.
This deferral comes after criticism of the tax change and coincides with Prime Minister Justin Trudeau’s resignation and the proroguing of Parliament. Taxpayers preparing 2024 filings will now report capital gains under the current 50% inclusion rate. The Canada Revenue Agency (CRA) has reverted to administering the lower inclusion rate, with updated forms to be released soon.
Joelle Kabouchi, Pamela L. Cross and Grace Pereira from our Canadian member firm Borden Ladner Gervais have published a more detailed analysis of the deferral and its implications here.
For similar content to our Global Guide, subscribe to our mailing list and keep up to date.