The Economic Action Plan 2013 offers to raise the Lifetime Capital Gains Exemption (LCGE) to CAD800,000 from CAD750,000 for the recognition of the importance of small business owners, farmers and fishermen. With indexing, the LCGE limit for the year 2015 is CAD813,600 from CAD8000 and will be applicable on certain small business shares and farming and fishing property. The exemption also helps these businesspersons better guarantee their economic security for retirement, and eases the intergenerational transfer of their businesses. The capital gain is stated in part 1 and schedule 3 of the personal income tax return. The calculation of capital gain deduction is done on form T657 and this deduction can be demanded against taxable capital gains on the clearance by an individual of:
- eligible Small Business Corporation (SBC) shares
- capable farm property, and
- for characters occurring after 1st May 2006 due to eligible fishing property.
