01/10/2025
Despite all our best hopes, I received this from the proverbial horse's mouth (Canada Revenue Agency) this morning:
TLDR: The CRA will be issuing the proper forms (which we needed 3-4 months ago to do this right as the filing deadline has passed for the earliest corporate year ends affected by this change) by the end of this month to move forward with the change to the capital gains inclusion rate, despite what we hope will be the obvious outcome at the end of the current fiasco in Ottawa. They say they'll "support" amendments necessary should the bill not move forward.
Update on the status of Capital Gains Tax Changes
On September 23, 2024, the government tabled a Notice of Ways and Means Motion to introduce a bill entitled An Act to amend the Income Tax Act and the Income Tax Regulations. This Notice of Ways and Means Motion modified the motion tabled on June 10, 2024. For more information about the capital gains tax changes, please visit the Notice of Ways and Means Motion.
Although these proposed changes are subject to parliamentary approval, consistent with standard practice, the Canada Revenue Agency (CRA) is administering the changes to the capital gains inclusion rate effective June 25, 2024, based on the proposals included in the Notice of Ways and Means Motion tabled September 23, 2024. Parliamentary convention dictates that taxation proposals are effective as soon as the government tables a Notice of Ways and Means Motion; this approach provides consistency and fairness in the treatment of all taxpayers.
The CRA will issue the forms to allow taxpayers to file in accordance with the new capital gains rules by January 31, 2025. Arrears interest and penalty relief, if applicable, will be provided for those corporations and trusts impacted by these changes that have a filing due date on or before March 3, 2025.
When Parliament is prorogued, or dissolved, the CRA will generally continue to administer proposed legislation consistent with its established guidelines.
Upon resumption of Parliament, if no bill is passed in the House of Commons, and the government signals its intent to not proceed with the proposed measures, the CRA would cease to administer them. If this scenario described were to materialize, the CRA will be ready to support taxpayers in ensuring any corrective reassessments of implicated returns are processed.
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