Increase in Capital Gains Inclusion Rate Deferred Until January 1, 2026
- Posted:
The Government of Canada has announced it is deferring the proposed increase in the capital gain tax inclusion rate until January 1, 2026.
As announced in the 2024 Federal Budget, the government proposed to increase the capital gains inclusion rate from one-half to two-thirds for capital gains realized after June 25, 2024. The first $250,000 of capital gains realized by individuals would continue to be subject to the one-half inclusion rate. With Parliament being prorogued until March 24, 2025, the legislation to enact these proposals has not yet been approved and has caused uncertainty and confusion amongst taxpayers and tax preparers.
The announced deferral is a welcomed temporary relief for Canadians. Whether the legislation to enact the prepared capital gains inclusion rate will be approved remains uncertain.
In the interim, taxpayers will want to revisit their investment assets with accrued gains and plan to take advantage of the reduced capital gains inclusion rate accordingly.
Should you have any questions about this announcement, please do not hesitate to contact our team at Williams & Partners. Thank you for your continued trust and we will continue to keep you informed on any further updates.
Yours very truly,
Williams & Partners