Canada: Revised draft legislation increasing capital gains inclusion rate

Finance released revised draft legislation increasing the inclusion rate for capital gains realized on or after June 25, 2024. 

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September 30, 2024

Finance released revised draft legislation increasing the inclusion rate for capital gains realized on or after June 25, 2024.

Although the draft legislation is largely the same as the previous draft released on August 12, 2024, it includes some taxpayer favorable changes in response to Finance’s most recent public consultations on the rules:

  • Adjusting certain formulas related to depreciable property that has been subject to a change in use or certain non-arm’s length transfers and to individual’s capital gains that continue to be subject to the 1/2 inclusion rate
  • Addressing a timing issue in changes to the loss reduction rules for graduated rate estates
  • Introducing an additional transitional rule for certain taxpayers that are members of a partnership

The capital gains changes are not yet law, and it remains unclear when the draft legislation may be included in a bill.

Read a September 2024 report prepared by the KPMG member firm in Canada

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