On April 16, 2024, the Federal Government tabled Budget 2024, which proposed various provisions impacting individuals and businesses. One measure introduced in the budget was an increase to the capital gains inclusion rate. The inclusion rate for corporations, individuals and trusts will increase from one half to two thirds of the actual capital gain; however, individuals will still retain the one-half inclusion rate on the first $250,000 of capital gains annually. The increase is proposed to be effective for capital gains realized on or after June 25, 2024.
On September 23, 2024, the government tabled a Notice of Ways and Means Motion (“NWMM”) to introduce a bill to implement the inclusion rate increase. As of November 14, 2024, the legislation has not received royal assent despite the retroactive application of the proposals. The CRA is administering the changes to the capital gains inclusion rate effective June 25, 2024, based on the proposals included in the NWMM even though the proposals have not become law.
On November 14, 2024, the CRA confirmed impacted forms for individuals, trusts and corporations are expected to be on Canada.ca as of January 31, 2025. Furthermore, they announced arrears interest and penalty relief will be provided for corporations and trusts impacted by these changes that have a filing due date on or before March 3, 2025. The interest relief will expire on March 3rd. More details are expected in the coming weeks.
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