Currently, when an individual realizes a capital gain (or loss), 50% of the capital gain is taxable, while 50% of the capital loss is deductible.

Beginning June 25, 2024, the inclusion rate will increase from 50% to 66.7% for the portion of capital gains realized by an individual that exceeds $250,000.  As a result, individuals will now have to take into account two inclusion rates if their capital gains exceed the $250,000 threshold.

This $250,000 threshold will apply to capital gains realized in a year by an individual, directly or indirectly, through a partnership or a trust, after deducting, among other things, the individual's capital losses for the year and capital gains for which the lifetime capital gains exemption limit was claimed for the year. The $250,000 annual threshold for individuals will apply for 2024 as a whole—it will not be prorated according to the number of days.

However, net capital losses from previous years will still be deductible from taxable capital gains realized as of June 25, 2024. They will be adjusted to account for the capital gains subject to the new inclusion rate. In other words, a capital loss sustained before the rate increase will completely offset an equivalent capital gain realized after the increase.

The 66.7% inclusion rate will also apply to corporations and trusts, but, generally speaking, the $250,000 threshold will not.