On January 31, 2025, the Canada Revenue Agency (CRA) announced that it is no longer administering the increase to the capital gains inclusion rate since the federal government had decided to postpone the increase to January 1, 2026. The CRA also announced interest and penalty relief until June 2, 2025 for "Impacted T1 Individual Filers" and until May 1, 2025, for "Impacted T3 Trust filers" to provide additional time to meet their tax filing obligations.
When the CRA planned to administer the capital gains inclusion rate increase, it announced arrears and penalty relief for corporations and trusts with filing due dates on or before March 3, 2025. However, the specifics of how this relief would be calculated remained unclear.
The CRA has confirmed that the previously announced interest and penalty relief for corporations no longer applies:
"As the capital gains rate change is now proposed to be effective January 1, 2026, corporations can continue to use existing forms and tax software to file using the one-half inclusion rate until further notice. Penalty and interest relief was originally announced for those corporations with a filing due date on or before March 3, 2025, to allow time for corporations to work through the new forms which were expected to be published on January 31, 2025. As forms for the T2 Corporation Income Tax Return related to the capital gains inclusion rate are not being revised at this time, there is no longer a basis for providing relief."
Originally posted on LinkedIn on February 19, 2025
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Ryan Minor
Chartered Professional Accountants of Canada
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