The Conference for Advanced Life Underwriting (CALU) has written to the Tax Policy Branch of the Department of Finance Canada to request that the government reconsider its plans to increase the capital gains inclusion rate from one half to two-thirds for all taxpayers realizing capital gains over $250,000.

In particular, they warn that the government’s implementation date of June 25, 2024 is unnecessarily short. “It is also problematic that taxpayers and their advisors have not seen the draft legislation impacting their financial decisions and well-being,” the letter states. It later asks the government to defer the implementation date to correspond with the date of Royal Assent. It also asks for the government to recognize the validity of binding agreements of purchase and sale that are in place prior to the implementation date. Deemed disposition options and the integration of taxes on capital gains between shareholders and private corporations and life interest trusts were also discussed in the communication.

The association is also asking the government to increase the exemption allowing a 50 per cent inclusion rate in the year of death, to $500,000. Regarding inflation, they add that the $250,000 exemption should be increased by annual changes in the Consumer Price Index in a manner that is similar to the increases made to tax free savings account (TFSA) contribution limits.

“CALU supports the federal government initiatives to make the tax system fairer and more equitable, which in turn will assist with the funding of new public priorities. However, we do not believe the Budget 2024 capital gains proposals in their current form adequately fulfill this mandate. We therefore recommend that the federal government not proceed as planned,” they write.

They conclude, adding another call out to the government to make the details of their proposal clear to those who need to work with them: “We emphasize the need for the federal government to expeditiously share the legislative details of these proposals to provide taxpayers with certainty regarding the tax treatment of capital gains accruing before the implementation date.”