Blog: Potential Increase of Capital Gains RateMarch 18th, 2016
As many of you are aware, the upcoming federal budget will be tabled on Tuesday, March 22. There are several rumours (right now that is all they are) that some tax changes may be coming. There is speculation, again unsubstantiated as far as we are concerned, that the capital gains rate may increase from 50% to 75%. Usually, tax changes proposed in a federal budget are made prospectively (i.e. effective as of the budget date) but there have been instances where the government has deviated and made the tax change retroactive to the beginning of a year.
We do not typically plan based on speculation and rumours. However, given this potential tax change, if you were planning on selling an asset (e.g. investments, real property, etc.) with an accrued gain later this year, you may want to consider selling it immediately. Remember that that the trade must be settled by March 22nd. If you still wish to own the investment, you can always buy it back immediately after.
Just a friendly tax tip.
If you have any questions, please contact Aaron Schechter.