Capital Gains – What a Mess
It seems our latest emails are about taxes – and we are not accountants.
The capital gains tax is a mess! Sometime last spring the federal liberal government proposed to raise the portion of capital gains on which companies pay tax to two-thirds from one-half. This also applied to individuals with capital gains earnings above $250,000.00. Many companies and individuals rearranged their affairs as a result of this upcoming change.
But this proposal has not yet been passed into law, and of course the government is prorogued until March 24. Despite this, the CRA has said they will proceed as if the proposal has been passed, and charge the higher taxes. In other words, the law states taxes are paid on one-half of the gain, but CRA is charging tax on two-thirds of the gain.
There is now a law suit against the CRA filed by a Vancouver law firm. We will keep you posted, but in the meantime if you have clients with capital gains issues have them seek accounting advice. Go through your database and if you find clients that have purchased investment property reach out and make sure they get the proper advice!
BTW we are compiling answers to all questions we received on our last email on the BC Flipping Tax. This will soon be posted in our Knowledge Centre on our website, we will let you know when.
Thank you, chat soon!