Tax Tables

1. Marginal tax rate for capital gains is shown as a % of total capital gains (not taxable capital gains).

2. Gross-up rate for eligible dividends is 38%, and for non-eligible dividends is 15%.

3. Negative amounts can only be used to offset other income taxes payable (it is assumed the taxpayer has other income).

4. Salary, RRSP/RRIF withdrawals and other income are taxed at the regular rates, e.g. see other income.

5. One can invest currently up to $7,000.00 per year or the cumulative amount you haven't contributed to date in a tax-free savings account (TFSA).

   Any income earned, capital gains or contributions within the plan can be withdrawn tax-free. Withdrawals can be re-contributed in a future year, as long as you have available contribution room.

   As of 2025, the potential cumulative contribution room could be up to $102,000 for someone eligible since 2009. Individual contribution room varies.

6. Ineligible dividends are defined as dividends paid by a Canadian company from income which is subject to the small business deduction.

   Eligible dividends are dividends paid by a corporation taxed at high rates, other than investment income generally paid by a public company or a dividend paid to an investment company originating from a public company and then paid through to an individual taxpayer.

7. Canadian dividends and capital gains have a significant tax advantage. For taxpayers with lower income, dividends are particularly attractive.

8. Capital gains are only taxed when realized. Accrued capital gains are tax-deferred until disposal.

   Negative amounts can only be used to offset other income taxes payable (It is assumed the taxpayer has other income)

   Capital Gains

   The Government is deferring the proposed increase in taxable capital gains from June 25, 2024, to January 1, 2026. Who knows, based on our political climate, whether the proposed increase will ever come into effect? Therefore, the capital gains inclusion rate remains at 50%.

   The lifetime capital gains exemption, effective June 25, 2024, will increase to 1.25 million.

   The principal residence exemption remains tax-free on the sale.

9. Home office expenses allowed.

   You may claim expenses for using part of your home as a place of business eg. ‘work space’ in a self-contained domestic establishment, providing:

   a.The workspace is your principal place of business, workspace is used exclusively for the purpose of earning income from your business

   b.Provided you qualify for a deduction at all under those tests, you set aside ‘space’ exclusively for your business of earning income expenses deductible.

   1. Workspace portion of your rent, insurance property taxes, mortgage interest, heat and light.

      Telephone related to the business, supplies, capital cost allowance, computer, furniture and equipment.

                       The Combined Corporate Tax Rates (Federal & British Columbia)

                                                                                   2025                 2024
                                    General                                27.0%            27.0%
                                    Small Business                     11.0%            11.0%
                                    Investments                         50.7%            50.7%

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