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ARTICLE · 20 MAY 2024

Federal Budget 2024 – Proposed Changes To Capital Gains Rules

Gardiner Roberts LLP
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The 2024 Federal Budget1 ("Budget 2024") released on April 16, 2024, proposes to increase the capital gains inclusion rate ("CGIR") from one-half to two-thirds and to effect a one-time...

CanadaTax
Greg Farano
Greg Farano
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The 2024 Federal Budget1 ("Budget 2024") released on April 16, 2024, proposes to increase the capital gains inclusion rate ("CGIR") from one-half to two-thirds and to effect a one-time increase to the lifetime capital gains exemption ("LCGE"), and introduces a reduced CGIR for certain dispositions of qualified shares by an individual, referred to as the Canadian Entrepreneur's Incentive ("CEI").

Proposed Changes

Increase to Capital Gains Inclusion Rate Paragraph 38(a) of the Income Tax Act (Canada)2 provides that, with certain exceptions, one-half of the capital gain3 from the disposition of property is included as a taxable capital gain in a taxpayer's income. A taxpayer's capital gain is generally the amount by which the "proceeds of disposition"4 in respect of "capital property"5 exceeds the total of the "adjusted cost base"6 of the capital property and any outlays or expenses to the extent that they were made or incurred by the taxpayer for the purposes

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