An article by PPI’s Planning Services team, a group of lawyers, accountants and actuaries who provide tax and estate planning support to Advisors affiliated with PPI.
Effective June 25, 2024, the 2024 Federal Budget in Canada proposed to increase the capital gains inclusion rate to 2/3 from 1/2 for corporations and most trusts* and for individuals for capital gains over $250,000**. This means for individuals and certain trusts, the first $250,000 is at a 1/2 inclusion rate and above $250,000, the inclusion rate is now 2/3. In B.C., the tax rate on capital gains is 26.75% on the first $250,000 but 35.67% over $250,000. This is an 8.92% increase (the other provinces differences range from an increase of 7.92% to 9.13%). The Budget stated that the $250,000 threshold was introduced so that only the wealthy would be affected. Well, this is not the case when someone passes away – the middle class will have their tax liability on their death increase by 33 1/3% for capital gains over $250,000. Continue reading “After June 25, 2024, Your Client’s Tax Liability on Death May Have Increased! Time to Revisit How to Fund the Tax Liability”