The recent federal budget unveiled Tuesday outlined a number of changes to Canada’s tax code, but none are likely to have a bigger impact than the increase to Canada’s capital gains tax regime.
That’s according to Ali Spinner, Tax Partner with Crowe Soberman LLP, in a recent interview with BNN Bloomberg.
Capital gains are accrued when an investor sells an asset such as a stock, property or business. Under the current rules, beyond the personal exemption of $250,000, half of any capital gain is taxed at the filer’s marginal rate. Under the new proposed rules, 66 per cent of the gain will be included.
For capital gains under that $250,000 level the tax inclusion rate is still 50 per cent.
The new rules are slated to come into force on June 25 and Spinner says that looming deadline may prompt many Canadians to sell assets before it comes.
“You actually have to make sure you connect with your accountant and work through the numbers to see what the true tax rate is going to be because you may find your tax rate could be closer to 33 per cent before June 25,” says Spinner.
She says the new rules reinforce the importance of seeking professional tax help in certain circumstances.
Functionally, many tax filers will be looking at a 33 per cent increase in what is included in their taxes.
“This is huge,” she says. “The amount of time that you would have to wait before being in an equivalent tax position … is likely over 15 years.”
Watch her entire interview in the player above.
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