Many practitioners have told me that the Canada Revenue Agency (CRA) has not been properly assessing individuals who claimed the Lifetime Capital Gains Exemption (LCGE) in 2024. Specifically, the CRA has reportedly used an incorrect maximum LCGE amount in its assessments. These incorrect assessments appear to have been issued throughout 2024, not just for dispositions occurring on or after June 25, 2024 ("period 2").
We contacted the CRA to ensure they were aware of the issue and to obtain guidance for practitioners with affected clients. CPA Canada specifically requested that the CRA proactively reassess impacted taxpayers, and we are pleased to report that the CRA has confirmed it will do so.
The Individual Returns Directorate provided the following response:
"An issue was discovered in early April 2025 affecting the calculation of the capital gains deduction. However, the CRA took immediate action, and the calculation issue was resolved on April 21, 2025. Any return filed after April 21 was not affected by this issue. For taxpayers who have already filed, the CRA will be taking corrective action on a priority basis. There is no action required on the part of affected taxpayers. Once the corrections have been made, affected taxpayers will receive a notice of reassessment."
If you're aware of any individuals who were initially assessed incorrectly and later reassessed by the CRA to correct the LCGE, please let us know.
If you have filed a return after April 21, 2025, received an incorrect reassessment on account of the LCGE and are open to sharing your NOA with the CRA, we would be pleased to pass it along for them to investigate.
Originally posted on LinkedIn on May 23, 2025
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Ryan Minor
Chartered Professional Accountants of Canada
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