2024 Federal Budget

Capital Gains Tax

Capital gains tax inclusion rates will increase from one-half (50%) to two-thirds (66.67%) on amounts over $250,000 effective June 25, 2024 for individuals, corporations and trusts. Amounts under $250,000 of annual gains for individuals will continue to benefit from the 50% inclusion rate.

Alternative Minimum Tax

The 2024 Federal Budget includes further amendments to the AMT tax rules that were originally proposed in the 2023 Federal Budget and drafted in the August 4th, 2023 tax legislation. In particular, this year’s budget proposes that taxpayers can claim 80% of the charitable donation tax credit when calculating AMT, instead of the 50% proposed in the 2023 budget - which is good news. Second, changes to the capital gain inclusion rate on realized capital gains on or after June 25th, 2024, may keep more donors in the ‘regular tax system’ rather than pull them into the AMT tax regime.

However, the 2024 Federal Budget does not propose to change the draft legislation which will include 30% of the capital gains on the charitable donations of publicly-listed securities for purposes of the AMT calculation. This element of AMT tax reform stays as it was originally proposed in the 2023 Federal Budget.

Source: See the Budget Update from the Canadian Association of Gift Planners to determine the effect of this change on the cost of a gift of appreciated publicly-listed securities.