— April 16, 2024 —

Budget 2024 was unveiled by the federal government on April 16th. It brings significant changes impacting individuals and businesses alike. As you navigate through the busyness this tax season, here’s a summary of the key provisions to keep you informed in case clients put you on the spot:

1. Capital Gains Changes: Effective June 25, 2024, the inclusion rate for capital gains will increase from 50% to 2/3. Individuals retain the 50% rate on the first $250,000 of gains per year, while corporations and trusts will face the 2/3 inclusion rate on all gains.

The Lifetime Capital Gains Exemption rises to $1,250,000 from its previous level, effective June 25, 2024. This amount will be indexed for inflation starting in 2026.

2. Accelerated CCA: An accelerated Capital Cost Allowance (CCA) rate of 10% is introduced for new purpose-built rental projects beginning construction on or after April 16, 2024. Eligible properties must meet specific criteria, outlined in the budget.

3. Alternative Minimum Tax (AMT): Amendments to the AMT regime proceed with adjustments, including an 80% donation tax credit under AMT and exemptions for certain Indigenous trust entities.

4. Employee Ownership Trust Tax Exemption: Individuals disposing of shares to an employee ownership trust in a qualifying business transfer between January 1, 2014, and December 31, 2026, become eligible for a $10 million capital gains exemption.

5. Canada Disability Benefit: Payments to eligible Canadians will begin in July 2025, offering a maximum benefit of $2,400 per year for individuals aged 18 to 64 eligible for the disability tax credit.

6. Canadian Entrepreneurs’ Incentive: Expected in 2025, the incentive introduces a halved capital gains inclusion rate for qualifying shares, subject to stringent criteria.

7. Canada Carbon Rebate for Small Businesses: An accelerated process for carbon rebates to Canadian Controlled Private Corporations (CCPCs) in certain provinces will be introduced, with eligibility based on employee count and provincial jurisdiction.

To review the full budget click here.

AJAG remains committed to keeping you updated on these changes as they unfold. For more detailed information and ongoing updates, ensure you subscribe to our email newsletter at the top or bottom of this page and follow us on LinkedIn here.

Stay informed, stay proactive, and together, we can navigate the evolving landscape of our profession.