Breaking News - Capital Gains Inclusion Rate Increase Postponed to January 1, 2026

Breaking News - From Finance Canada today - a postponement of capital gains inclusion rate increase from June 25, 2024 to January 1, 2026—the new date on which the capital gains inclusion rate would increase from one-half to two-thirds on capital gains realized annually above $250,000 by individuals and on all capital gains realized by corporations and most types of trusts.

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The red tape is significant, and the governmental processes are not ready. Unfortunately, that’s what your clients will find if they want to get a head start on energy efficient retrofits with new government assistance programs before the winter comes. The federal process involves several government departments and sharing of data that could also put clients at increased risk principal residence audits.  The help of a tax professional can be invaluable to access an interest free loan of up to $50,000, a $5000 grant and up to $600 to get a required home-energy evaluation.

The Canadian government responded to the Covid-19 pandemic by offering Canadian business access to emergency funds through the Canada Emergency Wage Subsidy (CEWS), which helps with up to 75% of eligible remuneration paid by employers that have suffered a decline in revenue during the pandemic. The CRA reports that there have been over 3,878,970 approved applications with a total dollar value of subsidies approved of over $86 billion. Business owners and the tax professionals working with them should be prepared for CRA audits that will ask for proof of eligibility. Here’s what you need to know:

Private member’s Bill C-208 received Royal Assent on June 30.  It aligned the tax treatment of intergenerational transfers of family businesses, farms and fisheries with sales to unrelated parties.  However, the federal government attempted to circumvent Royal Assent and postpone implementation of the bill.  On July 19, a Finance Canada news release clarified it will respect the spirit of the law passed on June 30, but will introduce draft legislation for amendments to it.  The government is also intending to bring forward draft legislative amendments to the Income Tax Act with an opportunity for consultation, which will then be introduced in a bill and apply a of either November 1, 2021 or the date of publication of the final draft legislation – whichever comes later.