2024 Federal Budget and Beyond

May 21, 2024, 9:02PM

38m 55s

 

[Welcome Slide]

[CIBC Private Logo, “Capital Gains Tax Planning”]

[Guest Speaker is Debbie Pearl-Weinberg – Executive Director, Tax and Estate Planning]

Appt, Michael:
Hello. Welcome everyone.
My name is Michael Appt and thank you very much for coming today.
As many of you are aware, the federal government has proposed a new budget could have far reaching impact on many Canadians.
Today we hope to cover off some of the common questions that we're receiving from the client base.
We have all heard that the federal budget is going to change how capital gains would be taxed in the future.
What are they?
And will they happen?
Are there any other situations that could be impacted by these changes?
Many people are questioning whether or not they should sell their investments before these changes come into effect.
Is that a good plan?
Some people have investments inside of a corporation, professional corporation, etcetera.
But how does this impact the situation?
What are the changes propose that could impact people that are selling a business?
These are some of the common questions that we've been getting. To assist in answering these questions,
Debbie Pearl Weinberg, a tax expert and estate planning lawyers joining us.
She is executive director of tax estate planning with CIBC private wealth, having previously been the general tax counsel to CIBC. Debbie is an adjunct professor at the University of Toronto Law School.
She is currently vice chair of the Investment Fund Institute of Canada's Taxation Working Group.
She writes, consults on a variety of personal and small business tax issues.
Debbie is a speaker, both internally to CIBC advisors and to industry conferences, symposiums and client events.
She's been a guest on CBC Radio 1 Ontario today, been quoted a tax expert and investment executive, global advisor, and advisor.ca Debbie over to you.

Pearl-Weinberg, Debbie:
Thank you very much, Michael.
So yes, we've had a lot of questions coming in about the capital gains, changes that were proposed in the budget.
But before I go over exactly what the changes are, I just want to make it clear that the capital gains inclusion rate hasn't always been 50%.
As a matter of fact, from 1990 until mid 2000, it was actually at a 75% inclusion rate.
So we have seen instances where the inclusion rate has gone up and where it's gone down in the past.
OK, so let's look at what the changes are and what do we even mean by capital gains inclusion rate.
 

[Slide titled “Proposed Budget Change”]

[Slide shows the current capital gains inclusion rate versus the proposed inclusion rate (as of June 25, 2024). It breaks down how it will affect individuals and corporations]

 

So currently where you earn a capital gain where you realize a capital gain on the disposition of some property, only 50% of the capital gain is included in your income.
So if you earn $100 capital gain only $50.00, you're is included in your income and you pay tax on that $50.00.
So that's what we mean by the capital gains inclusion rate.
And right now it's 50%.
What was proposed in the budget that came out last night is that as of June 25th, 2024, this will change in certain circumstances.
Now for individuals, the inclusion rate will increase to 66 2/3%.
Where an individual earned capital gains over 250,000 annually.
So for the gains over $250,000 on an annual basis, and that's cumulative, they'll be taxed to that 66 2/3% inclusion rate for gains up to 250,000 annually.
That will remain at that 50% capital gains inclusion rate.
And the one thing that is different for this year in particular is that that $250,000 threshold, it's also going to apply for gains realized between June 25th, 2024 and the end of this year.
However, for corporations and trusts, they're not going to get that $250,000 threshold.
According to the budget documents for corporations and trusts, in every situation, 66 2/3% of capital gains are included in income.
So that means earning $100 capital gain, taxed on 66 2/3% of that amount.
No threshold, but the one thing that I want to be really clear about is that no draft legislation has been released to date.
So we don't have a lot of details.
We don't know if there's going to be any exceptions, and we also don't know when draft legislation and details are going to be released.
So a lot of you know what we're presenting on is on the very basics that was included in the budget documents and what people are expecting will occur.
So I know a lot of people have questions about capital loss carry forwards and carry backs.

 

[Slide titled “Capital Losses”]

[Slide discussed capital loss carry forward and carry back]

Essentially, what happens if you have a capital gain that you realize in a year and you also have capital losses that you realize in a year you can offset your capital gains with capital losses.
But if you have more capital losses than capital gains, you can actually carry forward those capital losses to use in another year to offset capital gains or you can carry them back if you years three years back.
And so people are really concerned.
Well, what if I had a capital loss, you know, from two years ago where it was a 50% inclusion rate and now after June 24th, I have a 66 2/3% inclusion rate on my capital gain.

So the in the budget document it indicated that, umm capital losses from previous years will be adjusted to reflect the inclusion rate of the capital gain that is offset and that itself being used to offset.
So the capital gain and capital loss inclusion rate should always match.

 

[2024 Maximum Personal Tax Rates]

[Table with the following categories: Region, Eligible Dividends, Capital Gains (with 50% inclusion), New Capital Gains (with 66.67% inclusion), and Other Income]

Now in terms of what this means for tax rates and what change we can see to tax rates, I have up here, maximum personal tax rates, various provinces and you can see highlighted in red is Ontario.
So capital gains with a 50% inclusion rate for an Ontario top marginal as if it's an individual, this is for individuals pay top marginal rates, they are subject to a 26.76% inclusion rate.
So that means earn $100 of capital gains, going to pay $26.76 of tax. If that same individual is now subject to the 66.67% inclusion rate, their tax rate is going to go up on that $100 capital gain to 35.69.
So they'll pay $35.69 additional tax.

So where do we think we're going to see this impacted?
Well, lots of situations.

 

[Situations Impacted]

[List of Situations: Vacation properties, income/rental properties, employee stock options, charitable donations ‘in-kind’, death/estate planning, becoming non-resident, trusts, holding investments in corporations, sale of a business]

I'm just going to go over a few of these situations in our call today because we won't have time to go over every single situation and but obviously investment proposals, we're going to see that.

 

[Situations Impacted]

[Slide focuses on Vacation Properties/Principal residence exemption and Income/Rental properties]

But beyond investment portfolios, we're going to see vacation properties possibly impacted.
Now there is something called the principal residence exemption, where you own a home that you reside in and it doesn't have to be full year.
It can be a seasonal property.
You can have the gain exempt from tax using a principal residence exemption and this is sort of decided year by year.
You designate a property as your principal residence in a particular year.
But you can only designate one property in a year as your principal residence, and this applies for family units.
Being spouses, common law partners and minor children, so that family unit can only designate one property a year.
So when you own more than one property, let's say home and a cottage, you have to figure out where you're going to designate which property to designate as your principal residence, and you only have to do this in the year that you sell the first, because that's when you file tax return and you’re to decide whether or not you're designating that property as your personal residence.
And if you designate it for all the years that you owned it, that it's completely free of tax.
So it's going to be more important now to figure out, well, where do I see the best bang for my buck to say which gain do I see being the most on an average year by year?
So when you sell the first of those properties, what should I designate. Also really remember, especially for vacation properties where you do improvements that increases what's called your cost base of the property.
So that will reduce your gain later on if you own a property jointly, you can actually split it with your joint holder.
And the other thing that people might want to start thinking about for vacation properties is if they don't sell the during their lifetime and they you hold it on your death, there's what's called a deemed disposition on death of all your capital properties.
So you're deemed up, disposed it and you realize a capital gain or capital loss at that time.
So for cottages, what is fairly common is that people purchase life insurance to cover the taxes on any capital gain that can rise on that property on their death.
If they will not have the principal residence exemption to use, so now people might have to reevaluate well, do I have sufficient life insurance if the capital gains inclusion rate is going to be higher and it's particularly tricky if somebody can no longer if they don't qualify for insurance anymore.
So this is things that people are thinking about income or rental properties where you cannot use a principal residence exemption there.
And but again, if it's jointly owned, maybe you know if you both contributed to the property, you can split the capital gain so you can both use your $250,000 threshold to have some of the gain taxed at that lower rate.

 

[Situations Impacted (Continued)]

[Slide discussed Employee Stock Options and Donation of publicly listed securities in-kind]

Employee stock options not going to go into a lot, but just know if you hold employee stock options you might see an increased rate of tax when you exercise certain options after June 24th of this year.
Donations of publicly listed securities.
When you make a donation of a publicly listed security or mutual funds in kind, meaning you actually donate that property to a charity, any capital gain that you realize on the donation when you dispose of it to the charity is actually not subject to tax no tax on that gain.
So it's always generally better to if you're going to make a donation rather than selling a property publicly listed securities and then donating the proceeds, it’s better to donate the property in kind and many, many charities accept this and this will be even a better higher benefit, if that gain is subject to the 2/3 inclusion rate.
Now I talked about on death that there's a deemed disposition of all your capital property,

 

[Situations Impacted (Continued)]

[Slide focused on Death and Becoming a Non-resident (departure tax)]

in non-registered accounts and so even if somebody during their lifetime is under that $250,000 capital gain threshold, so their capital gains are still taxed at a 50% inclusion rate, on death they could see something different because then if all their properties need to be disposed of, it could have a higher inclusion rate for the gains over 250,000.
Now this happens on the death, if you have spouses or common law partners, this happens on the death of the second to die because there is a rollover available when property is transferred to your spouse or common law partner on death. And then just in case you have any clients who are thinking of leaving Canada becoming a non resident, we have in Canada what's called departure tax.
So again, you're deemed to dispose of most of your capital property.
Canadian real estate is an exception.
But your other capital property, you're deemed to have disposed of when you leave Canada and you could realize capital gains and have to pay tax at that time.
And again, that could be over 250,000 even if, while you were resident in Canada, you really didn't have that high capital gains.

 

[Trusts]

[Slide contains information on: More Trusts (personal and mutual funds), Alter-ego and joint spousal/common-law partner trust, and Estates]

Trusts.
Now I know Michael had some clients asking about either personal trust, prescribing loans to personal trust, or they've invested in mutual funds, ETF's, hedge funds, mutual funds, hedge funds, ETFs are all types of trust.
Some of them are corporations, but most of them are trusts.
So remember, for trusts they don't have this $250,000 threshold of gains taxed at that lower 50% inclusion rate.
However, it's not an issue for most trusts because distribute all their income and gains out to beneficiaries each year.
So then it'll be taxed in the beneficiaries hands and the beneficiaries, the individuals should be eligible for that $250,000 threshold again.
We are not sure.
There's no details yet.
I can tell you that the mutual fund industry is really, you know, looking into this and asking questions of the government is anticipated that for 2024 that whether or not something is included at the 50% inclusion rate or the higher inclusion rate will be dependent on when the trust realizes the capital gain and not when it's distributed to beneficiary.
But we really have to wait for the draft legislation to be able to confirm that.
The one exception where this could be an issue is for something called alter ego, spousal trusts, joint spousal trusts, common law partner trust.
These are all type of trusts where one person is entitled to all of the income from the trust while they're alive and possibly capital from the trust as well.
But nobody else can get anything income capital from the trust and on their deaths, or if it's a joint trust, joint partner or joint spousal trust on the death of the second of those people to die, the residual amount in the trust goes to the residual beneficiary.
So for instance.
Michael can set up what's called an alter ego trust for himself and then on his death, his children could be the beneficiaries.
Or he could set one up for him and his spouse.
Or sometimes you see people set up these trusts in their wills for their spouse to get all their property in a spousal trust.
And whatever is left after their spouse passes away goes to their children, and this is very common actually in the case of second marriages, where you want to support your spouse from the second marriage, but you want the residual amount to go to your children from your first marriage.
Now on the death of the individual who's entitled to the income and capital during their lifetime, before the property goes to those residual beneficiaries, say the children, there is a deemed disposition in the trust.
All the property in the trust and the trust actually has to pay the tax on those capital gains.
And if the rules don't make an exclusion for these type of trust, then all those capital gains that are earned in the trust on the death of this income beneficiary during their lifetime, those will be taxed at that higher marginal tax rate.
So we'll have to see whether or not there's an exclusion for those types of trusts.
And people also asked, well, what about estates?
Because estates are, they're actually a trust.
So after somebody passes away, whatever property doesn't go yet to your beneficiary, it's held in the estate, which is a type of trust.
Some estates have a better tax treatment.
They're called graduated rate estates, so usually for the first three years after your gap, your estate is called what's called a graduated rate estates.
So it gets graduated rate tax treatment just like we do as individuals.
The same type of thing the tax rate goes up.
The more income that is earned in the in the trust. Most trusts are subject to just tax at the highest marginal tax rate.
But either way, whether it's a graduated various state or a non-graduated rate estate, either way, that estate, unless there's an exclusion made in the draft legislation, will be subject to tax at that 66 2/3% inclusion rate on capital gains that are earned within the estate.
And no $250,000 threshold.

 

 

[The Big Question]

[Slides contains the following questions: Do we trigger capital gains before June 25, 2024? Do we trigger capital gains of $250,000 annually?]

[Slide provides CRA technical information, on when the General Anti-Avoidance rules does not apply]

So I'm sure you been getting questions about this Michael, and big question, do we trigger capital gains before June 25th, 2024 or after that date?
Should we start triggering $250,000 of capital gains annually?
So to make sure that in subsequent years in a way we have gains taxed at that 50% inclusion rate rather than the higher inclusion rate.
So the first question in the tax community well, will the Canada revenue agency , CRA apply guard, which is something called the general Anti avoidance rule to change the tax consequences.
If you do this, if you purposely trigger gains to get this lower inclusion rate and the Canada Revenue Agency actually issued a technical interpretation earlier a couple weeks ago and indicated that they're not.
If people purposely trigger capital gains before June 25th, they're not going to apply the general anti avoidance rule in those situations, unless something else is going on.
 

[ON 2024 Example: Planning for an increase in the CG inclusion rate]

[Slides contains information on the following: What is the cost with the new CG Inclusion Rate]

[Slide breaks down Strategy 1: Individual trigger accrued CG before June 25, 2024]

[Slide breaks down Strategy 2: Individual trigger annual CG of $250,000]

[Slides introduces topic of Time value of tax repayment]

 

So let's look at what the what the actual cost is with this new increase in the capital gains inclusion rate and what people need to think about before they trigger gains prior to June 25th of this year.
So, for this is for individuals, so the top personal tax rate right now on capital gains is 26.76%.
So that's with the 50% inclusion rate and somebody tax at the highest marginal tax rate in Ontario.
And that will go up to 35.69% for capital gains subject to tax at that higher inclusion rate.
So we're seeing an increase of 8.93% for capital gains subject to the new inclusion rate.
So, strategy number one, people are thinking about well, should I just trigger capital gains before June 25th?
So for every $100,000 of capital gains, there will be a tax savings of 8930 compared to capital gains that are above 250,000 after that date.
Or do you trigger annual capital gains of $250,000 on a $250,000 capital gain?
You're looking at a savings of $22,325 each year.
When $250,000 of capital gains are taxed at that lower inclusion rate rather than the higher inclusion rate.
So, there's the time value of prepayment.

 

[Time Value of tax prepayment – an example]

[Slide contains example of Ontario 2024 – Should an individual trigger annual CG of $250,000?]

[The slide breaks down the difference or additional tax, between the current tax rate and the new tax rate. It asks the Time Value Question: do you pre-pay a certain amount earlier to save in taxes overall?]

So that's look at that.
Let's look at that and we'll look at the second question.
Should an individual trigger an annual capital gain of 250,000. So again, tax rate on your first 250,000 annually will be at that 26.76% on $250,000 of capital gains you’re looking at tax of $66,900.
If you earn it after June 25th, 2024 and it's over that original $250,000 threshold, you're looking at tax at a rate of 35.69.
So overall, tax on that $250,000 gain will be $89,225.00.
So that is a difference of $22,325.00 that's the additional tax that you pay.
So here's the question, do I prepay $66,900 of tax earlier than you would have to save $22,325 in taxes overall?
And the question is, what is the time value of that money?
Because you're pre-paying, right?
So what you have to look at is the time frame that you'll be holding that answer, how long until you're planning on selling and what is your rate of return on it?
And so there's been calculations done on various rates of return and how long it's going take to break even and at a 6% rate of return, this is just capital gains, deferred capital gains calculations have indicated it's been take about 8 years to break even.
So those are the thought processes that people are going to have to go through and deciding whether or not you're going to sell now or you're going to hold because in the long term you'll be better off holding and not prepaying tax and having that amount to be invested.

 

[Situations Impacted (Continued)]

[Slide breaks down Holding Investments in a Corporation]

So what I've just gone through all those analysis and all those tax rates were for individuals.
So somebody holding assets personally, rather than holding them in a corporation and when you hold property in a corporation the tax is different.
There's two levels of tax.
First of all, corporation pays tax when it earns income and then when amounts are distributed to you as a shareholder, you pay tax at the shareholder level.
So what you have to look at is the overall tax rate of burning it inside a corporation.
And what will the change be there?
So you know, the first issue is that there is no $250,000 threshold where the first, you know amount of taxable gains will still be subject to that 50% inclusion rate at the budget has said that all capital gains are into incorporation after June 24th of this year will be subject to the higher inclusion rate.
So this is going to impact, you know, all sorts of corporations and it will impact professional corporations because often professional and corporations, the reason for incorporating was that if you don't need all the income that you're earning professionally, if you earn it inside a corporation and you don't take it all out because active business income is taxed at a lower rate initially inside the corporation, then if you earned it personally, you can save more in the corporation if you leave it in there and don't take it out because you have more to invest inside the corporation, until you take it out.
So there's going to be an impact to professional corporations because tax will now be at higher rate.
There's also another reason that some people hold investments in the corporation, and there can be many other reasons, but one common reason that we see is where people are concerned about US estate tax.
So even as a Canadian, non US person never lived in the states, are not a U.S. citizen or non US person, if you hold a high amount of large amount of US situs properties.
So it could be stocks and bonds of US issuer as it could be US real estate and you're above a certain exemption amount when you pass away U.S estate tax could be owing and one way that people.
A minimize or eliminate this US state tax is that they hold investments in a corporation because corporation is not subject to the US estate tax, and so the individual isn't holding the assets directly.
Now, there's always been a cost of earning US dividends in a corporation and now there's going to be this added cost of the capital gain being earned inside a corporation. So people are going have to think about that when they're considering whether or not they're going use U.S estate tax.
So I indicated that when you're looking at taxes, when you're looking at capital gains earned from corporation, you have to look at both what is paid in the corporation and what's paid when is taken out.
And so that combined corporate and personal tax rates.

 

[ON 2024 Integration Summary]

[Slide contains a table with the following columns: income type, corporate tax rate, integrated corporate/personal tax rates, personal highest tax rate, tax savings (cost)]

So in the corporation, when it's earned, when it's taken out, what an individual pays as taxes on the dividend income it receives when it takes out that after tax amount of the capital gain that's called the integrated tax rate.
So when we look at a corporation in Ontario and an individual again earning the top marginal tax rate in Ontario, when you look at what the corporation will pay and then what the individual pays when they take it out, that overall combined tax rate on a capital gain in Ontario is 28.96%.
Now compare it to the tax that an individual would or looking if they aren't a direct directly
That would be 26.76%.
So what we say there is there's a 2.2% tax cost in earning it through a corporation.
And again, there's reasons of earning it through a corporation.
As we just said, for professional corporations you people have and earning them through a corporation and then had more to save and so earned higher amounts of investment income and their portfolio grows at a larger rate.
So that 2.2% tax clause and capital gains, not horrible if we look at the going up and inclusion rate.
So this now this 66.67% inclusion rate, the overall integrated cost of earning that capital gain in a corporation and then hang it out to an individual, it's 38.62%.
And again at the individual had to pay tax at that higher inclusion rate, they would pay 35.69%.
So that's only a bit higher of a tax cost 2.9% versus 2.2%.
So that's not, that's not horrible only, you know, point 7% increase in the overall tax cost.
But I think what people also need to look at is, well, what if I, as an individual, if I earn the capital gain directly?
I only pay tax at the 50% inclusion rate, whereas if Corporation earned that capital gain, it would pay tax at that higher inclusion rate.
So how do you compare that?
Well, let's look at that.

 

[Cost of Earning $250,000 capital gains in corp vs personal (from June 25,2024)

[Slide contains table with the following columns: Region, Integrated Tax rate as of June 25,2024, Top personal tax rate as of June 25,2024, and Tax Savings (Cost)]

And on this slide, sorry, I don't have it highlighted, but if you look down to Ontario, you're going to see that.
So you're integrated tax rate in Ontario as of June 25th, 2024 is 38.62%, so that means you're earning your capital gain in the corporation pay tax in the corporation takes out of the corporation.
It's the dividend that's the combined rate corporation and you pay on that same capital gain.
So $100 capital gain $38.62 of tax will be paid overall, whereas as an individual, if I have less than $250,000 of capital gains in a year, I'm only going pay tax at 26.76%.
So I'm going to only pay $26.76.
So now we're looking at an 11.86% tax cost so that is a much higher tax cost, so you have to think about, you know, wearing earning capital gains compared to earning individual that individually and what tax rate would the individual even pay on it.
So you can see that it's an even more complicated question.
When you're earning those capital gains through a corporation and sorry to make it even muddier, but that's just what we're left with.
So next let's move a little bit of away from the capital gains inclusion rate.
Let's look at sale of the business and other things that have come out of the budget.

 

 

[2024 lifetime capital gains exemption (LCGE)]

[Slides discusses lifetime capital gains exemption when selling shares of a corporation]

So the first thing is when you sell a certain items such as shares of a corporation that was carrying on a business you might be eligible for something called the lifetime capital gains exemption, and this applies when you sell first of all, farming or fishing property.
Don't know if anybody holds that on this call, but also where you have something called qualified Small Business Corporation shares and I'll go through the requirements in a minute, but the amount of this exemption.
So when this exemption applies, capital gain up to this amount is exempt from tax, no tax on it.
And it's a lifetime amount.
You can use this one over your lifetime.
This total amount over your lifetime.
So right now the lifetime capital gains exemption is 1.016 million just over that, and it's indexed annually, but the Budget indicated is that is going to go up now to 1.25 million for capital gains realized on or after June 25th, 2024, and then starting in 2026 it will be indexed again.
So how do you get this?
What are the requirements to qualify for this?
So first of all, at the time of sale, the time that you sell the shares over 90, at least 90% of the assets and the corporation have to be used in active business.
And so that means you might have to get rid of some investments in the corporation if you want to do that sale, and also in the two years in the 24 months prior to the sale, at least 50% of the assets have to be used in active business.
So that's planning that people do prior to sale and they try and do that a few years prior to thinking about a sale.

 

[Canadian Entrepreneurs’ Incentive (CEI)]

[The slide breaks down how this incentive will be helpful to people operating a business through a corporation]

So that's good if you qualify for that Something else that the Budget introduced that can be helpful to some people operating a business through a corporation is a new incentive called the Canadian Entrepreneurs Incentive.
And where this applies and you sell a business then the capital gains inclusion rate will be 1/2 of what it would have been otherwise.
So, for instance, if you're capital gains inclusion rate would have been 66.67%, it will be 33.33%.

 

[Canadian Entrepreneurs’ Incentive (CEI) phase-in)

[Slide contains table with the following columns: Year and CEI]

This is going to start next year, January for sales as of January 1, 2025, but it's going to come in over time.
So it'll be effective as of 2034 for gains up to $2,000,000.
So it will be quite useful as it rolls in.

 

[Canadian Entrepreneurs’ Incentive (CEI): Conditions]

[Slide discusses conditions for CEI at: time of sale, during 24 months prior to sale, and the individual claiming the CEI]

And when can you use this?
So very similar conditions as for the lifetime capital gains exemption at the time of sale, you have 90% of your assets used in active business and 24 months prior to the sale at least 50% of the assets have to be used in an active business. But then the for the individual claiming this Canadian entrepreneurs incentive, it's a little different and they have to be a founding investor and hold shares for at least five years owned 10% of votes of value and have to be actively involved for at least five years prior to the sale.

 

[Canadian Entrepreneurs’ Incentive (CEI): Exclusions]

[Slide provides list where CEI won’t apply to shares of professional corporations and corporations whose principal business is: financial, insurance, real estate, food and accommodation, arts, recreation, entertainment, consulting and personal care service]

But the big issue with this is that there's a lot of exceptions that it doesn't apply to and one of the big ones is professional corporations.
So professional corporations will not be eligible for this incentive, and you can see there's a lot of other types of businesses that will be not, but won't be as well.
But let's assume you have a manufacturing business and you can utilize, this exemption.

 

[Example of tax on capital gains when Canadian Entrepreneur’s Incentive (CEI)]

[Slide demonstrates what to account for, during the sale of a business: LCGE, CEI, 50% inclusion rate, 66.67% inclusion rate]

I'm just going go through illustrating all the different incentives that you could use if you sell something in 2034. So the first is that the 1st 1.25 million, well, that will be an indexed amount, so some amount higher than that of the capital gain will be completely exempt from tax if the lifetime capital gains exemption is available. On the next $2,000,000 of proceeds or sorry of gain, assuming that you qualify for this Canadian entrepreneurs incentive that will be taxable at a 33.33% tax rate as sorry inclusion rate not tax, rate inclusion rate.
And then on the next $250,000 capital gain, you'll get 50% inclusion rate and anything over to that will be subject to this fire 66.67% inclusion.

 

[Should I sell or Should I hold? Capital Gains Tax Planning]

[Slide discusses a report from Debbie’s team, that is now available on cibc.com]

And before I end I just wanted to tell you about one recent report that our group has put out.
It's should I sell or should I hold capital gains tax, mining and it's up on cibc.com but if you would like the link sent to you, Michael, I'm sure you could assist with that.

Appt, Michael:
Definitely

Pearl-Weinberg, Debbie:
And with that, I don't know if there's been any questions.

Appt, Michael:
Great.
Yeah, we there's a function on the top here of the webinar we can ask questions, it says Q&A.

So if anybody has any questions, you can hit that button up there and put it into the chat, but actually got a question right now a little bit unrelated, but he writes.
If I saw my whole principal residence in Toronto, can I designate a vacation home in Florida as my principal residence for tax purposes?

Pearl-Weinberg, Debbie:
So I think what the person's asking for future.
So I've already sold my Canadian home.
So now I only own one home.
Can I start designating that Florida home?
Yes you can, but that's for Canadian tax purposes.

Appt, Michael:
That's how I read it, yeah.

Pearl-Weinberg, Debbie:
Again, there's going to be U.S.
Tax on that sales right.

Appt, Michael:
Right. OK.
No, I don't see any of the others come through.
So I want take this time to thank you, Debbie.
It's certainly a complicated topic and very far reaching, so thanks for taking the time to do this.
As always, if everybody has any questions about their personal situation, you can send me an email directly.

Pearl-Weinberg, Debbie:
No problem.

Appt, Michael:
We can assist with that because situations are different for everybody.
We will send out a recording of this after the fact, along with copy of the presentation at Debbie referred to.
So thanks everybody again for taking the time and enjoy your evening.
OK, bye.

Pearl-Weinberg, Debbie:
Bye. Bye.
Thanks Michael.