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Sheryne Mecklai

Sheryne Mecklai

Tax Partner at Manning Elliott Vancouver
Tax
November 15, 2024

CRA Announces Interest and Penalty Relief for Capital Gains Inclusion Rate Increase

On April 16, 2024, the Federal Government tabled Budget 2024, introducing several provisions that impact individuals and businesses. Among the most notable changes is an increase to the capital gains inclusion rate.

Under the proposed changes:

  • The inclusion rate for corporations, individuals, and trusts will rise from 50% to 66.67% of the actual capital gain.
  • However, individuals will retain the one-half inclusion rate on the first $250,000 of capital gains annually.
  • The new rate is proposed to be effective for capital gains realized on or after June 25, 2024. (Please refer to our previous blog post: CRA Capital Gains Inclusion Rate 2024 Adjustment)

On September 23, 2024, the government tabled a Notice of Ways and Means Motion (NWMM) to introduce legislation implementing the inclusion rate increase. As of November 14, 2024, this legislation has not yet received Royal Assent, despite its retroactive application.

CRA Updates on Forms and Relief

On November 14, 2024, the CRA provided the following updates:

  • Arrears Interest and Penalty Relief: Relief will be provided for corporations and trusts affected by these changes, specifically for filings due on or before March 3, 2025. However, the interest relief will expire after March 3, 2025.
  • Forms for individuals, trusts, and corporations reflecting the new inclusion rate are expected to be available on Canada.ca by January 31, 2025.
  • The CRA has indicated that more details regarding these changes and the relief measures will be provided in the coming weeks.

Consult a Tax Professional

Given the broad implications of the new rate, consider seeking expert advice. Our Tax Team can provide personalized guidance to help minimize potential tax liabilities and optimize your financial strategy under the updated rules.

For the official update and the latest resources, visit the CRA’s Capital Gains Inclusion Rate page.

 

Still Have Questions About the Capital Gains Inclusion Rate?

If you need clarification on any of the capital gains inclusion rate mentioned above, please contact a Manning Elliott tax team member.

Manning Elliott regularly posts new blogs and up-to-date articles on taxation changes by the federal and provincial governments.

NOTE: Federal and provincial tax laws are complex and are subject to frequent changes. Information contained in this  Manning Elliott blog is not intended to represent legal or tax advice. Please consult with your tax adviser before employing any strategies based on the information discussed within this article.