Federal Budget Proposes Changes to Capital Gains Tax
New Rules for Corporations, Trusts, and Individuals
The federal government has proposed a number of changes to capital gains taxation in its 2024 budget. These changes are designed to make Canada's tax system fairer and to ensure that everyone pays their fair share.
Changes for Corporations and Trusts
The budget proposes to tax all capital gains earned by corporations and trusts at a rate of two-thirds. This change would bring the tax rate on capital gains for corporations and trusts in line with the rate that individuals pay on capital gains.
Changes for Individuals
The budget also proposes to increase the inclusion rate on capital gains for individuals from 50% to 66.67% for capital gains above $250,000. This means that individuals will have to pay tax on a larger portion of their capital gains.
Changes for Business Owners
The budget proposes to increase the lifetime capital gains exemption for business owners to $125 million from $1 million. This change will allow business owners to defer paying tax on a larger portion of their capital gains.
Fairer Tax System
The changes to capital gains taxation proposed in the budget are designed to make Canada's tax system fairer. These changes will ensure that everyone pays their fair share of taxes and that the tax burden is shared more equally.
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