Extended Filing Deadline for 2024 Individual and Trust Returns

Canadian taxpayers have faced great uncertainty in the wake of the Government of Canada’s proposed changes to the capital gains inclusion rate in the 2024 budget. The change was to take effect June 25, 2024, was then delayed until 2025 and delayed again until 2026. While incoming Prime Minister Mark Carney has vowed to scrap the proposed inclusion change, in light of the delays, the Canada Revenue Agency (“CRA”) has extended the filing deadlines for certain 2024 individual and trust returns as follows:

• Individuals with capital gains or losses: June 2, 2025 (previously April 30, 2025); and
• Trusts with capital dispositions: May 1, 2025 (extended from March 31, 2025))

Individuals without capital gains or losses and trusts without capital dispositions must adhere to the standard filing deadlines noted above.

Individuals should also note the following:

• The CRA has yet to announce whether the extension also applies to an individual who does not have capital gains or losses in 2024 but has a spouse, or common-law partner, who does. If not, this could cause issues for spouses with income eligible for the pension income split.
• The difference in wording for the individual and trust exemptions. A trust is eligible if it has a capital disposition to report, while an individual must have a capital gain or loss. In other words, it is unclear whether an individual reporting a tax-deferred capital disposition, such as on a s.85 or s.86 exchange – where proceeds are deemed equal to the adjusted cost base and there is no gain or loss – is eligible for the extension. Assuming the difference in wording is intentional, individuals with tax-deferred capital dispositions should not bank on penalty and interest relief for returns filed after April 30, 2025.

For eligible individuals and trusts, the CRA will grant relief from late filing penalties and interest for returns filed by the extended deadlines.

With respect to self-employed individuals, there is no change to the June 15, 2025 filing deadline. Therefore, while penalties will not accrue for returns filed by June 15, interest will accrue on balances owing after April 30, 2025.

If you believe you have capital gains or losses to report on your tax filing this year, please do not hesitate to reach out to the experts at Hogg, Shain and Scheck.