What's new for capital gains for 2024

On March 21, 2025, the Government of Canada announced that it does not intend to proceed with a proposed increase to the capital gains inclusion rate. The Canada Revenue Agency (CRA) has already reverted to administering the currently enacted capital gains inclusion rate of one-half. This means that the inclusion rate for calendar year 2024 remains at one-half.

If you had a disposition of qualified farm or fishing property (QFFP), or qualified small business corporation shares (QSBCS) you must report dispositions of capital property, and business investment losses, for transactions before June 25, 2024 (Period 1) and after June 24, 2024 (Period 2) in the fields provided. This is necessary to support the increase to the Lifetime Capital Gains Exemption (LCGE) limit to $1.25 million, effective June 25, 2024. Separate reporting for Period 1 and Period 2 may also be necessary if you received a tax slip reporting dispositions in Period 1 and Period 2 because some tax slips had already been issued prior to the announcement.

Finally, please take note of the following administrative measures:

• While line 12701 for the capital gains reduction and line 25999 for the capital gains reduction add-back remain on the return, no amount should be reported on those lines. They are no longer applicable since the inclusion rate of 50%  applies for the entire 2024 calendar year.
• T4 slips may be issued with amounts reported at boxes 91 and 92 for security options deductions after June 24, 2024  at a rate of 33.3333%. If that is the case, follow the instructions and report the amounts from the T4 slip at line 24900 of your return. Also claim the additional security options deduction at line 24901 to increase your total security options deduction to 50% of the security options benefits received in the year (see the Federal worksheet for the calculation)

Capital gains deduction for qualifying business transfer

This new deduction is available to individuals on the sale of shares under a qualifying business transfer (QBT) where certain conditions are met.

An individual or individuals (other than a trust) who disposed of shares of the capital stock of a corporation to a trust (or to a purchaser corporation) under a qualifying business transfer (QBT) may jointly elect with the trust and, if applicable, a corporation wholly owned by the trust to claim a capital gains deduction. This deduction is for the taxable portion of up to $10 million of capital gains realized on the QBT. To apply the deduction to the shares:

• Form T24EOT, Joint Election for Capital Gains Deduction in Respect of a Qualifying Business Transfer, must be completed first.
• The individual(s) then uses Form T2048, Capital Gains Deduction for Qualifying Business Transfers, to report the elected amount and calculate the deduction they can claim.

Additionally, QBTs maybenefit from an extended 9 year reserve. A minimum of 10% of the gain is required to be included in income each year allowing the capital gain to be reported over 10 years.

Lifetime capital gains exemption

Under proposed changes, the lifetime capital gains exemption (LCGE) limit for qualified small business corporation shares and qualified farm or fishing property will increase to $1.25 million for dispositions that occur after June 24, 2024. Annual indexation for the $1,250,000 lifetime limit will resume in 2026. For more information about the LCGE, see What is the capital gains deduction limit.