Written by: Ana Rebro
There is no point in writing yet another summary of budget updates. You have seen enough of them. This is a blog to give you some talking points to look good at your next dinner party. And when people say “You seem really knowledgeable and informed on what these changes practically mean!”, you can proudly respond “That’s right! This is because my accounting firm is Farnham & Company!”.
So here we go. In no particular order, except for the first point, which is what you can lead with:
- The people running this country are completely off their rockers. Their policies continue to disrespect taxpayers. What would it take for them to realize that the way to grow the economy is to allow business owners to focus on their businesses instead of navigating endless tax changes and ridiculous administrative requirements!
- It is astounding that after the recent bare trustee and under-utilized housing debacles which wasted untold dollars and time , they now have the audacity to increase the capital gains inclusion rate from 50% to 66 2/3%, effective June 25, 2024. That’s in 10 weeks! That means that any dispositions of capital property (shares, capital assets) will result in much higher taxes if they happen on or after June 25 (there is some minor relief for individuals, as they can realize up to $250,000 in gains at the old inclusion rate).
- Who should care and what can they do?
- If you have a sale pending, ensure it closes before June 25,2024. This is relevant not just for sellers; buyers may be able to negotiate a better price by agreeing to close a deal early.
- You might consider triggering gains that would otherwise be deferred. This could make good sense if an arm’s length sale was imminent.
- If you are an individual who accrued more than $250k in capital gains, expect a higher terminal tax liability. The workaround is to die before June 25, or perhaps consider life insurance coverage.
- If you are considering departing Canada, which triggers a deemed disposition, start packing to be out of the country by June 25.
- Consider an estate freeze and utilizing a family trust structure, as accessing multiple individuals’ limits will be more advantageous.
And now excuse us, as we return to doing what we love (personal tax returns, of course!).