Stephen Bowman and Jay Winters write in Canadian Accountant on the impact to taxpayers of changes to the alternative minimum tax (AMT) regime. They include a capital gains study in their article.
Canada's 2023 federal budget proposes material changes to the AMT, which could result in significant increases to taxes on capital gains (i.e., five to six percentage points). Although practitioners have been half-expecting a capital gains inclusion rate increase since 2016 (which has not come to be), this is the practical effect of the AMT amendments for larger capital gains.
Stephen and Jay say the impact of the change is expected to be felt most often by those taxpayers who realize very substantial one-time gains from the sales of their businesses, disposal of substantial stock option positions, or very substantial donations of appreciated capital property. Given that these rules are proposed to come into effect for 2024, taxpayers have time to plan their affairs with these changes in mind.
Bennett Jones