By Penny Stayropoulos, CFA CIM TEP CFP FMA, Owner and Total Wealth Planner
If you’ve been hearing about capital gains changes for what feels like forever, you’re not alone. There was a lot of noise, a lot of debate, and (understandably) a lot of “So… what’s actually happening?”
Here’s the clean version:
- The proposed capital gains inclusion rate increase was cancelled in March 2025.
- The inclusion rate stays at 50% for everyone (individuals, corporations, and trusts).
- The Lifetime Capital Gains Exemption (LCGE) increase to $1,250,000 and already applies to qualifying sales.— and that’s the real win for many business owners.
So no, you don’t need to panic-sell assets before some “new two-thirds tax” kicks in. But yes, you still want a plan—because your timing, structure, and paperwork matter just as much as the tax rate.
Let’s break it down in plain language.
The Big Picture: What Actually Changed (and What Didn’t)
The inclusion rate didn’t change. It remains 50%. That means if you sell an asset and realize a $100,000 capital gain, $50,000 is taxable income (same as before).
What did move forward is the LCGE increase to $1,250,000 for qualifying sales (most commonly: qualifying small business corporation shares, plus certain farm/fishing property). For the right seller, that can mean a huge chunk of gains sheltered from tax.
That’s why planning still matters. When rules get messy in the headlines, the best move is usually to zoom out, confirm the facts, and then build your strategy around what’s actually in place.
Checklist for Individuals: No New Rate, Still Plenty to Plan
The big takeaway for individuals is simple: the inclusion rate is still 50%. No $250,000 threshold rules to worry about. No two-tier inclusion math.
So if you’re selling your cottage and expecting a $400,000 gain, the taxable portion is still:
- $400,000 gain → 50% inclusion → $200,000 taxable
Your Individual Checklist:
- Confirm what you’re selling (and what’s exempt). Your principal residence is still generally exempt. Cottages/rentals aren’t, and “mixed-use” situations need careful documentation.
- Use the LCGE if you qualify. The Lifetime Capital Gains Exemption (LCGE) is increasing to $1,250,000 for qualifying small business shares (and certain farm/fishing property). If a business sale is on your horizon, this is a major planning opportunity.
- Get your timing right. Even when rates don’t change, when you sell can impact your marginal tax rate, benefit clawbacks, and overall retirement cash flow.
- Harvest losses when it makes sense. Capital losses can still offset capital gains. Not exciting—but useful.
- Don’t “tax-plan” yourself into a corner. If you need to sell to fund retirement or a life change, tax is a cost—planning is how we reduce the unnecessary part.
Checklist for Corporations: Rate Stayed Put, But Structure Still Matters
For corporations, same story: the capital gains inclusion rate stays at 50%.
That said, corporate tax planning is rarely just about the inclusion rate. It’s about how gains flow through your corporation, how much ends up in your Capital Dividend Account (CDA), and how you actually get money into your hands (tax-efficiently).
Your Corporate Checklist:
- Assume 50% inclusion on corporate gains. No surprise two-thirds rate.
- Still review your CDA strategy. Even at a 50% inclusion rate, the CDA can be a big lever when you’re realizing gains inside a corporation.
- Run the “sell or hold” analysis anyway. Not because you’re racing a tax change—but because the right decision depends on cash flow needs, your investment policy, and your exit timeline.
- Focus on the LCGE win (if you’re selling shares). If you’re selling qualifying small business corporation shares, the LCGE increase to $1,250,000 is a real opportunity—but only if you qualify. That usually means planning ahead (sometimes well ahead).
- Coordinate with your succession plan. A clean corporate structure and a clear plan can be worth more than a last-minute tax scramble.
Checklist for Trusts: Less Drama on Rates, Still a Planning Area
Trusts also keep the 50% inclusion rate. So the “high-tax zone” isn’t about a new inclusion rate anymore.
But trusts are still a planning hotspot because of how income is taxed, who pays it (trust vs. beneficiaries), and how distributions are documented.
Your Trust Checklist:
- Start with the basics: 50% inclusion. No two-thirds rate to model.
- Review who should realize the gain. In some cases, flowing gains out to beneficiaries can still be useful (depending on their personal tax situation and the trust terms).
- Double-check trust type and deadlines. GREs, QDTs, and other structures have their own rules. Confirm before you act.
- Make sure the trust still matches the goal. Trusts are often set up for succession and estate planning—not just tax. It’s worth a periodic “Does this still make sense?” review.
Planning Strategies: Lifestyle Over “Just Math”
Here’s the part where I remind you that tax planning isn’t just about spreadsheets and calculations. It’s about designing a life you actually want to live.
Yes, minimizing tax is important. But so is making decisions that align with your retirement planning, your family goals, and your peace of mind.
A Few Strategies Worth Considering:
Donate appreciated securities to charity.
If you donate publicly traded securities directly to a registered charity, you can eliminate the capital gains tax entirely: and still get a donation receipt for the full market value. This remains one of the most powerful tax strategies available.
Don’t let the tax tail wag the dog.
If you need to sell an asset to fund your retirement, buy a home, or make a life change, the tax is simply a cost of doing business. We can work to minimize it, but don’t let tax anxiety keep you stuck.
Get professional oversight.
This isn’t a DIY situation. The interplay between personal tax, corporate tax, trust structures, and estate planning is complex. A fee-only financial advisor can help you see the full picture without any product sales or hidden agendas.
Wrapping It Up
If you felt confused, you weren’t behind—you were paying attention. The headlines made it sound like a major capital gains hike was inevitable, but the proposed inclusion rate increase was cancelled in March 2025, and the inclusion rate stays at 50%.
The bigger (and more practical) takeaway is this: the LCGE increase to $1,250,000 is still happening, and that can be a meaningful win for business owners who qualify.
Even when tax rates don’t change, good planning still pays:
- It helps you qualify for exemptions like the LCGE
- It keeps your corporate structure “sale-ready”
- It avoids last-minute, expensive, stressful decisions
If you’re wondering how this applies to your situation—personal assets, your corporation, or a trust—this is the right time for a simple check-in.
Want to confirm where you stand (and whether the LCGE applies to you)?
Book a Financial Clarity Call and let’s map out your strategy together: no product sales, no commissions, just unbiased guidance tailored to your life.
Penny Stayropoulos, CFA CIM TEP CFP FMA, is the Owner and Total Wealth Planner at PB Total Wealth Advisory and Consulting Corporation. She specializes in tax strategies, estate planning, succession planning, and lifestyle planning for business owners and professionals across Canada. Her subscription-based financial planning model ensures advice that’s always in your best interest.