Capital Gains Increase in Limbo with Trudeau Resignation
376 words / 1.5 min read
The future of increased capital gains taxes introduced last year is now in limbo following the resignation of Prime Minister Justin Trudeau.
WHY IT MATTERS: The increase on the capital gains inclusion rate took effect June 25, 2024. The changes are concerning to many physicians who have planned capital investments as part of a retirement plan.
While the changes were introduced in parliament, the legislation to enact them has not yet been passed. Parliament has now been prorogued, which means the session and all pending legislation have ended.
However, CRA’s practice is to apply tax changes when they are tabled in Parliament and will continue to enforce them until such time that a change in direction is received from a new parliamentary session or a new government.
“Despite the prorogation of Parliament, the government’s finance department has said that the proposed capital gains changes will remain effective for now,” said Jackie Carriere, Regional Head at MD Management Limited (MD). “As this is a dynamic and evolving situation, we recommend that physicians consult with their tax professionals to understand their individual tax circumstances and for more information about reporting capital gains incurred in 2024. At MD, the only national wealth management firm committed solely to Canada’s physicians and their families, we work closely with our tax and accounting partners to ensure these considerations are integrated into our clients’ financial plans.”
WHAT SHOULD YOU DO FOR NOW? The short answer is to talk to your accountant. “The capital gains changes could affect individual doctors in different ways,” explained Lainey Bokhaut, a local Chartered Professional Account with Bokhaut CPA who specializes in accounting and tax preparation for physician practices. “The best thing to do is work with your accountant to get personalized advice about how the changes and the possibility of changes being undone impacts your tax return.”
WHAT ARE WE DOING? Doctors Manitoba and other medical associations are again joining with the CMA’s call to drop the capital gains increases on medical corporations and physician practices.
GO DEEPER: You can learn more here:
Read our article from last spring that explains the changes and how they affect physician practices
Review this article from Global News that describes how this week’s political events could impact the capital gains hike.