Lifetime Capital Gains Exemption boosted to $1 million for farmers and fishers
The 2015 federal budget contained welcome news for Canadian farmers and fishers: the LCGE, a vital tax exemption for small businesses, was increased for this group immediately.
How much will this save farmers and fishers?
This increase can result in an additional $27,028 in federal tax relief for each farm and fishing business, according to the federal government. The increased amount exempted from capital gains tax will save farms and fishing businesses nearly $50 million over the next five years.
The limit was previously set at $813,600 before capital gains taxes kicked in. A CFIB campaign gathered over 1,000 signatures from farmers, asking the government to increase the LCGE to $1 million.
CFIB has a proven track record of getting major tax relief with the LCGE
- 2007: Increased to $750,000 from $500,000
- 2014: Increased to $800,000 and commitment to indexation
- 2015: Increased to $813,600 (since it was indexed to inflation)
- 2015: Increased to $1 million for farm and fishing businesses
The LCGE is an important tax measure for small business owners who depend on the proceeds from the sale of their business for their retirement income.
What’s next for the LCGE?
CFIB will continue to press the government to extend the increased LCGE threshold to all small businesses and to have the tax exemption apply to at least some business assets.
FOR MORE DETAILS: Major tax relief for small businesses in federal budget
Of further interest: Agri-business victory! LCGE will increase to $800,000 in 2014; Indexation in 2015