On January 31, 2025, the Department of Finance announced that the capital gains inclusion rate increase is being deferred to January 1, 2026. That same day, the Canada Revenue Agency (CRA) announced that it is no longer administering the capital gains inclusion rate increase.
The CRA also announced that it will grant relief in respect of late-filing penalties and arrears interest until June 2, 2025 for "impacted T1 Individual filers" and until May 1, 2025 for "impacted T3 Trust filers" to provide additional time for taxpayers reporting capital dispositions.
We reached out to the CRA and learned the following:
"Interest and penalty relief applies to any T1/T3 tax return where there is a disposition to be reported for the 2024 tax return. T3 tax returns that have already been filed using the one-half rate are not impacted. Relief would also apply to 2025 T3 tax returns where there is a disposition to be reported and the return has a fiscal period ending between January 1, 2025 and January 31, 2025"
We are seeking further clarification from the CRA regarding its policy. For example, do all graduated rate estates (GREs) with non-calendar year-ends in 2024 that report one or more dispositions qualify for relief? Additionally, does the relief extend to individuals who have exercised a stock option but retained the stock (i.e., no disposition)?
We are also seeking clarification on whether the previously announced interest and penalty relief will still apply to corporations with filing due dates on or before March 3, 2025.
We will provide further updates as they become available.
Originally posted in LinkedIn on February 14, 2025
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Ryan Minor
Chartered Professional Accountants of Canada
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