![]() ![]() ![]()
|
||||||||||||||||||||||||||||||||||||||||
|
![]() |
January 2002 Capital Gains Tax CutIn 2000 the Government of Canada reduced the capital gains inclusion rate from three-quarters to one-half. The inclusion rate is the portion of a capital gain that is subject to income tax. As a result of reducing the inclusion rate, Canada’s typical top tax rate on capital gains is now about 2 percentage points lower than in the United States. This measure is only one part of the Government’s Five-Year Tax Reduction Plan – the largest tax cut in Canada’s history. Under this plan, personal income taxes were reduced and other tax measures were put in place to reward entrepreneurship and stimulate economic growth (see below for a list of tax reduction measures). Example – Tax Savings on Capital GainsIn 1999 an individual would have paid $2,284 at most in federal income taxes on a $10,000 capital gain. In 2002 the maximum that the individual pays is only $1,450 – a savings of $834. The table below provides details on the tax savings.
For Further InformationFor general information about federal tax cuts, visit the Department of Finance Canada Web site at www.fin.gc.ca. Information is also available from the Canada Customs and Revenue Agency (CCRA): visit the CCRA’s capital gains Web page at www.ccra.gc.ca/capitalgains; or phone your local tax services office (www.ccra.gc.ca/tso) or the CCRA’s toll-free general enquiries line at 1 800 959-8281. About the Department of Finance Canada’s Tax Bulletin SeriesThis is part of a series of bulletins designed to give Canadians useful information about individual elements of the federal government’s Five-Year Tax Reduction Plan. Bulletins on tax measures and other publications may be viewed on the Web at www.fin.gc.ca, and copies may be obtained by calling the Department of Finance Distribution Centre at (613) 995-2855. Below is a list of the tax measures included in the plan:
|
||||||||||||||||||||||||||||||||||||||
|