Capital Gains Update
On Friday, January 31, the federal government announced that it would be postponing its plan to increase the capital gains inclusion rate. The original implementation date, June 25, 2024, has been deferred to January 1, 2026. This move clears up uncertainty heading into tax season.
The government will introduce legislation to implement the change in due course. However, they did not provide any details on when this legislation would be introduced.
Given the pledges from all leading Liberal leadership candidates and Conservative Leader Pierre Poilievre to scrap these changes, combined with a possible early federal election before October, these changes are increasingly unlikely to be implemented.
The CRA has been collecting the increased tax rate already, as if it had taken effect, even though the relevant legislation has not been passed. It is unclear what could happen to any capital gains tax increases already collected.
HRAI will keep you updated as further information becomes available.
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