Tax Planning
Capital Gains Inclusion Rate Change Delayed: What It Means for Investors
The government pushed back proposed increases to the capital gains inclusion rate to January 1, 2026 and cancelled some elements of the change—creating strategic opportunities for investors and trusts.
By NomadicTax Research Team • 5-8 min read • November 21, 2025
## What Was Proposed & What Changed
- In September 2024, the Department of Finance announced a change: for individuals and trusts, the **inclusion rate for capital gains exceeding $250,000 annually** would increase from **1/2 to 2/3**, and for corporations and certain trusts all gains would adopt the 2/3 rate. Effective date was originally **June 25, 2024**, but deferred to **January 1, 2026**. ([canada.ca](https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2025/update-cra-administration-proposed-capital-gains-taxation-changes.html?utm_source=openai))
- However, later, elements of this increase have been **cancelled or reversed**, meaning that several entities will not face the higher inclusion rate at all. ([canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/corporations/whats-new-corporations.html?utm_source=openai))
## Who is Actually Affected Now
- **Individuals and trusts**: only those realizing capital gains *above $250,000 annually* are impacted by the proposed increase effective January 1, 2026. Below that threshold, the current inclusion rate of 50% continues. ([canada.ca](https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2025/update-cra-administration-proposed-capital-gains-taxation-changes.html?utm_source=openai))
- **Corporations and “most types of trusts”**: as originally proposed, all capital gains will be subject to the two-thirds inclusion rate starting January 1, 2026. But with recent cancellations, some corporations/trusts may no longer be impacted. ([canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/corporations/whats-new-corporations.html?utm_source=openai))
## Strategic Implications & Planning Opportunities
- If you're planning to sell a capital asset or realize gains, doing so **before January 1, 2026** may lock in the lower 50% inclusion rate if you're going to cross the $250,000 threshold.
- Trusts and corporations should review expected gains; strategies could include shifting the timing of dispositions, using tax-loss harvesting before the effective date.
- For small-scale investors below the $250,000 threshold, the effect is minimal. But for those selling large portfolios or high value assets, this change may significantly increase tax bills.
## Example
- **Investor A** holds shares whose sale in 2026 will trigger a $300,000 capital gain.
- Under current rules (through end 2025), they include **50% of that**, meaning $150,000 is taxable.
- Under proposed rules from Jan 1, 2026, they’d include **2/3**, or ~$200,000 taxable income—raising tax payable on gains by ~$50,000 multiplied by their marginal rate.
## Things to Watch & Compliance Tips
- Keep detailed records of cost base, acquisition and disposition dates.
- Estimate your gains ahead of time to understand if you’ll cross the thresholds.
- Check current legislation to see which corporations/trusts changes apply to—some proposals have been cancelled.
## Final Thoughts
While the capital gains changes were proposed and delayed, the partial cancellations make for a mixed landscape. Investors should track their potential exposure and take proactive action before the new rates kick in—if they ever fully will.