Cambridge – A Liberal government will increase the lifetime capital gains tax exemption for small businesses and farmers by 50 percent Prime Minister Paul Martin announced today.
“There’s nothing small about the role small business plays in the creation of jobs and growth in Canada’s economy,” the Prime Minister said. “Raising the lifetime capital gains exemption to $750,000 from $500,000 will allow small-business people and farmers to keep more of the profit from the sale and transfer of their businesses to a new generation.”
“For many small-business owners and farmers, the sale of their business assets is central to their retirement plans,” added London North Centre MP Joe Fontana. “This measure will ensure they can keep more of the profit they have worked hard to build up.”
This measure will increase the lifetime capital gains tax exemption to $750,000 from $500,000. This means that Canadian business-owners who sell shares of a qualifying corporation for a profit can receive the first $750,000 of their gain tax-free.
Farmers will also be entitled to the lifetime $750,000 capital gains exemption on qualified farm property, for example, farmland, buildings and shares of farm companies.
Increasing the capital gains tax exemption builds on the measures taken by the Liberal government to create a tax regime that nurtures small-business development.
In addition to a competitive tax system, we also recognize that a smart regulatory system is key to helping small businesses succeed.
“That’s why the Liberal government has partnered with the Canadian Federation of Independent Business on the Paperwork Burden Initiative and made the government electronic tendering system more open and less onerous for business,” said the Prime Minister.