Tax increase to capital gains deferred to 2026 - KPMG Canada
Taxpayers will not be required to account for the proposed capital gains inclusion rate increase in their upcoming 2024 tax filings.
kpmg.comI can’t access live news directly from here, but I can summarize the current landscape on the federal budget and capital gains tax based on the latest widely reported developments up to 2026.
Direct answer
- The capital gains tax rules in several major economies have seen proposed or actual changes in recent budgets, with a focus on tightening inclusion rates, extending or indexing gains, and broadening the tax base. For the U.S., proposals in past budgets targeted higher tax rates on investment gains for high earners, but actual adoption depends on enacted law. For Canada, Budget 2024 proposed increasing the inclusion rate on capital gains for high earners, with implementation aimed for June 25, 2024, and subsequent deferrals or administrative actions affecting filing timelines into 2025–2026. Australia and other countries have also debated or enacted reforms affecting capital gains, including potential shifts away from the traditional 50% discount in some cases.
Contextual background and notable threads
- U.S. capital gains tax: Historically, proposals have floated higher top rates on long-term gains for high-income individuals to fund broader entitlement programs. Enactment depends on passage through Congress and any accompanying tax reform packages. If you’re tracking the latest, check the White House budget outlines and the U.S. Congress’ tax bills for the current year.
- Canada: Budget 2024 signaled a move to raise the inclusion rate on capital gains (from 50% toward a higher proportion) for individuals with substantial annual gains (e.g., over certain thresholds). The plan aimed for a June 25 implementation, with subsequent administrative and legislative steps affecting filing in 2024–2026. There have been reports of deferrals and CRA administration continuing under the new rate even when Parliament’s status was in flux, which can create a transitional period for taxpayers.
- Australia and other jurisdictions: Some 2026 budget discussions in various countries contemplated fundamental changes to CGT rules, including indexing of gains and minimum taxes, or extending coverage to broader asset classes. These reforms can be country-specific, with different trigger dates and grandfathering provisions.
What this means for you (practical steps)
- If you are a high-earner or have large capital gains, you’ll want to know the specific jurisdiction’s current inclusion rate, threshold, and whether the new rules apply to gains realized in a particular year or to gains realized after a transition date.
- Review taxpayer notices and official guidance for your country (e.g., Canada Revenue Agency filings or U.S. IRS notices) to understand deadlines, forms, and transitional rules.
- Consider a proactive planning review of your investments (sales timing, asset mix, and tax-advantaged accounts) to optimize after-tax outcomes under the latest rules.
- For Los Angeles residents and U.S.-based investors, stay tuned to the White House and Congress for enacted changes, and consult a tax advisor for year-specific planning.
Would you like me to pull the latest jurisdiction-specific summaries (U.S., Canada, Australia) and provide a concise, side-by-side comparison of the current rules, key dates, and filing implications for 2026? If you specify which country(s) you care about, I can tailor the guidance and include the most recent official references.