NEWS
Recent Changes to Capital Gains Inclusion Rate and Lifetime Exemption: What You Need to Know
The Canadian government has announced a delay in the implementation of the proposed capital gains inclusion rate change. Originally set to take effect on June 25, 2024, the increase from one-half to two-thirds will now be postponed until January 1, 2026.
In addition, the government confirmed that the Lifetime Capital Gains Exemption (LCGE) will increase to $1,250,000, effective June 25, 2024. This is positive news for business owners, farmers, and investors looking to maximize tax efficiencies on capital gains.
However, it is important to note that these changes still require formal legislation to become law. The lack of legislative action has contributed to the uncertainty surrounding tax planning, and with a federal election expected before April 30, 2025, there remains the possibility of further adjustments.
That said, the announced changes have significantly improved the likelihood of the LCGE increase moving forward. Given the widespread public and business support for the exemption increase, it is unlikely that a future government—regardless of party—would reverse this decision.
Our team will continue monitoring legislative developments and provide updates as more details emerge. If you have any questions or need guidance on your capital gains strategy, please don’t hesitate to reach out to your Stark & Marsh contact.