The Liberal Party of Canada recently presented the 2024 Federal Budget, which calls for a higher inclusion rate on capital gains above $250,000 for individuals, and on all capital gains for corporations and trusts, starting June 25, 2024.
We believe these changes highlight the urgency of taking a more tax-efficient approach within investment portfolios—because after all, it’s what you take home that counts.
In this paper, we argue that better after-tax returns could be hiding in plain sight for taxable investors able to systematically harvest capital losses and defer capital gains within separately managed accounts (SMAs). While no two clients have identical tax profiles, we find that systematic tax management within custom SMAs—already a canny approach, in our view—could further boost Canadian investors’ after-tax returns in the proposed inclusion rate regime.
