Jared Pilon
A lot has been written & reported recently in respect to the proposed changes to the capital gains inclusion rate as laid out by the Trudeau government and their Budget 2024 announcement.
Since the initial presentation of the Budget on April 16, 2024, the Liberal Party has decided to carve out the legislation that would apply to the inclusion rate increase into a separate stand-alone bill.
This would force all parties to vote on this measure independent from the Budget, thus allowing the Liberals to corner the other parties into voting for the increase or be classified as being supportive of the ‘ultra-rich’.
If passed, how will this legislation impact you?
Currently, one-half of capital gains are included in a taxpayer’s income. The proposed legislation will increase the inclusion rate to 66.67% or two-thirds for all capital gains realized on or after June 25, 2024.
For individuals, gains in excess of $250,000 (in a tax year) would be subject to the higher inclusion rate. Taxpayers such as trusts & corporations would be subject to the two-thirds income inclusion rate on all capital gains realized on or after June 25, 2024.
Should I take action now?
There are many factors that you should consider prior to triggering capital gains prior to June 24, 2024.
- Recent changes to the Alternative Minimum Tax regime may result in AMT being triggered for individuals and certain trusts.
- Recent changes to property flipping rules would result in an individual being required to report the disposition of a residential property (or right to a pre-construction property) held for less than a year as business income and subject to a 100% income inclusion.
- If you are planning to sell shares of a qualified small business corporation or qualified farm & fishing property, you will want to consider the proposed increase of the lifetime capital gains election to $1.25 million, as of June 25, 2024.
- The general anti-avoidance rule which is a measure that is intended to prevent taxpayers from receiving benefits from abusive tax planning.
Steps that you should take in response to this announcement.
Taxes are exceedingly high in Canada. Productivity is lagging and the bureaucracy is growing annually. Instead of accepting new taxes (which, contrary to Liberal talking points, is not only going to apply to only the ultra-rich) it is important to voice your concerns with your local Member of Parliament.
[date]
Dear [name of your Member of Parliament]
I am writing to you to express my concerns with the proposed capital gains inclusion rate increase as originally proposed by the Liberal government on April 16, 2024.
Canadians are currently overburdened due to excessive taxation and bureaucracy. Taxing the so-called ‘ultra-rich’ will not fix the productivity, inflationary or debt & deficit issues facing myself, my children or my grandchildren.
Accrued gains of $250,000 are not overly significant in 2024 given inflated real property prices as a result of the inflationary spending of the Liberal government during their time in office. This rate increase will impact families who own a cottage, business owners who have saved for retirement and generally, anyone in this country who risks their time and capital, in an effort to build a better country for us all.
I urge you and your colleagues to vote down this expected Bill and instead push for a complete review of Canada’s Income Tax Act as its complexity leads to the current tax inefficiencies in this country.
Please feel free to contact me if you need any further information, and I look forward to hearing from you on this issue.
Sincerely,
[your name]
Links:
Earl Dreeshen, Red Deer - Mountain View, AB
Blaine Calkins, Red Deer - Lacombe, AB
Chrystia Freeland, University - Rosedale, ON (Minister of Finance)
Justin Trudeau, Papineau, QB (Prime Minister)
Email addresses for all other Members of Parliament
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Posted: 5/6/24
