Changes to the capital gains inclusion rate and the employee stock option deduction rate (as proposed in Budget 2024) will apply to stock options exercised and shares sold on or after 25 June 2024. The new measure reduces the stock option deduction and capital gains tax exemption from 1/2 of the taxable amount to 1/3 of the taxable amount, if an individual’s annual combined limit of CAD 250,000 has been exceeded. The individual taxpayer can choose how to allocate the preferential tax treatment between the stock option income and capital gains to the extent the combined limit has been exceeded.

Canada’s Federal Budget 2021 (“Budget 2021”) proposes to expand the disclosure rules for certain transactions, which is in line with the measures recommended in the OECD’s Base Erosion and Profit Shifting Project, Action 12: Final Report (BEPS Action 12 Report).
The proposed expansion of mandatory disclosure rules contemplates: (i) changes to the Income Tax Act’s (ITA) existing reportable transaction rules; (ii) a new requirement to report notifiable transactions; (iii) a new requirement for specified corporations to report uncertain tax treatments; and (iv) an extension of the reassessment period in respect of transactions that are subject to the new disclosure rules and addition of penalties for failure to comply.

New Canadian trust reporting and disclosure rules will come into effect in 2021. In brief, the new rules will impose a filing obligation on certain trusts which currently do not have a filing requirement. They apply to non-resident trusts that currently have to file a T3 return and certain trusts that are resident in Canada. Such trusts will be required to report the identity of all trustees, beneficiaries and settlors of the trust, as well as anyone with the ability to exert control or override trustee decisions over the appointment of income or capital of the trust (e.g., a protector).