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Federal Budget Update

May 22, 2024

On April 16, 2024, the Federal Government tabled Budget 2024, which proposed a broad array of provisions impacting many individuals and businesses.
Some proposed items of interest include the following:

  • Increasing the lifetime capital gains exemption from $1,016,836 to $1,250,000 for dispositions taking place on or after June 25, 2024. The lifetime capital gains exemption is applicable for capital gains on qualified small business corporation shares and qualified farm or fishing property.
  • Canadian Entrepreneurs' Incentive - for dispositions in 2025 and later, the capital gains realized on the disposition of qualifying shares by an eligible individual will be subject to an inclusion rate of 33.33% (one-third). The amount of capital gains included at this preferential inclusion rate is subject to a lifetime limit. The lifetime limit is $200,000 beginning in 2025 and increased by $200,000 annually until reaching a total of $2,000,000 in 2034. To receive this reduced inclusion rate, several conditions are required to be met - further details are included in the Commentary in the link at the end of the email.
  • Canada Carbon Rebate for Small Businesses - an automatic, refundable tax credit for eligible businesses, sized in proportion to the number of persons they employ in certain provinces (Ontario is included).
  • Changes to the Home Buyer's Plan
    Increasing the withdrawal limit for the home buyers' plan from $35,000 to $60,000 for withdrawals made after April 16, 2024.
    - For participants making a first withdrawal between January 1, 2022 and December 31, 2025 the start of the 15-year repayment period would start the fifth year (previously this was the second year) following the year the first withdrawal was made.
  • Updates made to previously announced measures such as modifications to the alternative minimum tax (AMT), the General Anti-Avoidance Rule, and employee ownership trusts to facilitate business sales to employees.
Please see the Commentary for more details on these items found here - Click Here.

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