What does Parliament’s shutdown mean for proposed tax changes?
On Monday, Prime Minister Justin Trudeau resigned, and Parliament was prorogued. As a result, all Parliamentary activities, including committee sittings, have been terminated. All bills and motions before the House effectively “die on the Order Paper”.
What does this mean for the many tax proposals that have yet to become law? Here are the highlights:
The proposed increase to the capital gains inclusion rate may not proceed, but CRA is applying them as if they will. Taxpayers can choose to file based on the proposed rules and claim a refund of taxes if the inclusion rate doesn’t change, or file based on the current 50 per cent inclusion rate and risk additional taxes and interest if the rate goes up.
Proposals clarifying bare trust reporting are now in limbo, though bare trusts will be exempt from filing returns for the 2024 tax year (unless asked to file by CRA).
It is unclear what will become of the announced extension for 2024 charitable donations. Taxpayers won’t know the status of this relief, provided in response to the Canada Post strike, before the proposed February 28, 2025 deadline to make donations that can be applied to the 2024 tax year.
To read further details, please view the Advanced Wealth Planning Group’s summary AT THIS LINK.
