The recent budget proposals regarding capital gains may affect some of your clients. Use this Capital Gains Tax calculator to compare the tax on capital gains using the current 50% inclusion rate to the new 67% inclusion rate announced in the April 2024 federal budget.
Capital Gains Tax Calculator
Discover how the proposed new inclusion rate may affect your clients.
Inclusion Rate Change
The inclusion rate will increase from 50% to 67% on capital gains greater than $250,000 in a year as of June 25, 2024. The inclusion rate for individuals will remain at 50% for capital gains under $250,000 in a year. For corporations and trusts, the inclusion rate will increase to 67% on all capital gains.
Budget Proposal
The 2024 Canadian Federal Budget proposed to raise the inclusion rate on those proceeds to 66.7 per cent for all corporations and trusts and for individuals making more than $250,000 in capital gains annually. For individuals, any such gains made under that bar would continue to face the current inclusion rate of 50 per cent.
Who this may affect
The proposed capital gains inclusion rate increase targets high-income individuals who realize significant capital gains each year, such as in their non-registered investment portfolios. However, the proposed capital gains inclusion rate increase may also affect individuals who may be disposing of personal use property (such as their cottage), rental properties, shares of private corporations, farming, and more.
Considerations
Calculations use marginal tax rates as of Janaury 2024. Rates take all federal and provincial taxes and surtaxes into account and the basic personal tax credit. Calculations do not factor in the AMT (Alternative Minimum Tax), if applicable.
Note: The new inclusion rate rules have not yet been passed into law.
To help with your planning, try these related calculators:
• Capital Gains Tax Break-Even Calculator
• Taxes and Investment Income
• Final Tax Bite
• TFSA vs Taxable Income
Capital Gains Tax Calculator
Companion Infographic
This Canadian Budget infographic illustrates highlights of the 2024 Federal Budget and how the changes that may affect your individual and family finances. This is updated with each Budget to help clients understand personal finance changes that may affect them.
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