2024 Federal Budget Tax Measures: Your Guide to Canadian Tax Updates | Knowledge

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Selected Tax Measures in the 2024 Federal Budget – Canada | Knowledge



“In a groundbreaking move, the Minister of Finance (Canada), Chrystia Freeland, unveiled the highly anticipated 2024 Federal Budget on April 16, 2024. This budget, aimed at reshaping Canada’s tax landscape, proposes significant changes to the Income Tax Act and the Excise Tax Act, along with updates on existing tax measures.

Let’s dive into some of the key proposals and updates included in Budget 2024:

**Increasing the Lifetime Capital Gains Exemption**

One of the major highlights of Budget 2024 is the increase in the Lifetime Capital Gains Exemption (LCGE) from $1.016 million to $1.25 million. This move aims to provide more relief to individuals on the disposition of certain qualified shares or properties.

**Canadian Entrepreneurs’ Incentive**

Another notable proposal is the introduction of the Canadian Entrepreneurs’ Incentive (CEI), which seeks to reduce the tax rate on capital gains for eligible individuals. This incentive would apply to qualifying dispositions starting from January 1, 2025, with a phased-in lifetime limit of $2 million by 2034.

**Capital Gains Inclusion Rate**

Budget 2024 also suggests increasing the capital gains inclusion rate from 50% to 66.7% for corporations and trusts. For individuals, the 66.7% rate would apply to capital gains exceeding $250,000 annually. This change aims to generate additional revenue for the government while impacting high-income individuals.

**Impact on Employee Stock Options**

Under the proposed changes, claimants of the employee stock option deduction would receive a 33.3% deduction of the taxable benefit to align with the new capital gains inclusion rate.

As with any budget proposal, there are varying perspectives on how these changes will impact Canadians. While some argue that these measures will promote entrepreneurship and innovation, others express concerns about potential tax burdens on high-income individuals.

In conclusion, Budget 2024 sets the stage for a new era of tax reform in Canada. It will be crucial for stakeholders to closely monitor these proposals and actively participate in discussions to ensure a fair and balanced tax system for all.”



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