Proposed 66% Capital Gains Inclusion Rate – Impact Of Parliament Shut Down
The 2024 federal budget proposed a new 66% capital gains inclusion rate which ostensibly took effect on June 25, 2024. However, although the measure was tabled in Parliament, it was not ratified into law. With Parliament now prorogued until late March, the proposed changes have technically died.
While this might seem like good news on the surface, the CRA’s stance on the implementation of the proposed rules adds a layer of complexity. Prior to the proroguing of Parliament, a CRA manager indicated that CRA auditors would act as if the proposal were already law, despite it not receiving parliamentary approval. As reported by Blacklock’s Reporter and later picked up by the Toronto Sun, CRA Project Officer Nina Loussoupova stated:
“If Parliament is dissolved for an election before the higher inclusion rate has become law, the Agency will continue to administer the proposed legislation.”1 2
How and if the CRA will change its approach is uncertain. There is a possibility that the bill could be revived once Parliament returns on March 24, though this might lead to a vote of non-confidence, which today’s prorogation aimed to avoid.
Additionally, unresolved issues with Bare Trust reporting add to the uncertainty for the upcoming tax-filing period.
Given these complexities, we recommend contacting your accountant and tax advisor for detailed advice on navigating this unprecedented tax-filing environment.
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