Should Manufacturing Co Owner Manufacturing Co Sale LCGE in British Columbia (2026)? The Decision Tree With Real $2.5M Numbers
Quick Answer
A 57-year-old Surrey manufacturing company owner sells his precision machining operation for $2,500,000 as a share deal. Adjusted cost base: $200,000. Capital gain: $2,300,000. The 2026 LCGE shelters approximately $1.25M of that gain on qualifying small business corporation (QSBC) shares under ITA s. 110.6 — leaving $1,050,000 exposed. At 50% inclusion, that’s $525,000 of taxable income. At BC’s top combined rate of 53.50%: approximately $280,875 in capital gains tax. After-tax proceeds: roughly $2,219,000. Without QSBC qualification, the full $2.3M gain is exposed — $1,150,000 taxable, approximately $615,250 in tax. After-tax: $1,885,000. The LCGE saves $334,000 on a $2.5M manufacturing sale in BC. But at this price point the LCGE doesn’t cover the entire gain, so the decision tree has four branches: QSBC qualification, share vs. asset structure, capital gains reserve, and estate freeze timing.
Key Takeaways
- 1On a $2.5M manufacturing company sale in BC, the LCGE shelters approximately $1.25M of the $2.3M capital gain — but $1.05M remains exposed. At BC’s 53.50% top combined rate and the flat 50% inclusion, the exposed portion generates approximately $280,875 in tax. After-tax proceeds with LCGE: ~$2,219,000. Without: ~$1,885,000. The LCGE saves $334,000.
- 2The capital gains inclusion rate in 2026 is a flat 50% for all individuals, corporations, and trusts. The proposed 66.67% rate above $250K was cancelled March 21, 2025. Every figure in this article uses the confirmed 50% flat rate.
- 3Manufacturing companies face a unique QSBC risk: equipment held in a separate leasing entity or real property owned personally rather than by the corporation. Both reduce the opco’s active-business asset ratio below the 90% threshold required at disposition under ITA s. 110.6.
- 4The 5-year capital gains reserve under ITA s. 40(1)(a)(iii) can save $40,000–$80,000 on the $525K of taxable income from the exposed gain. Spreading $105K/year across 5 years instead of $525K in one year drops each year out of BC’s top bracket.
- 5An asset sale on a $2.5M manufacturing deal eliminates the LCGE entirely and triggers PST on equipment transfers in BC. The combined cost of losing LCGE + PST exposure can exceed $400,000 compared to a properly structured share sale.
- 6At $2.5M, an estate freeze done 2–3 years before the sale would have locked the next generation’s shares at a lower ACB and potentially multiplied the LCGE across family members — sheltering up to $2.5M of combined gain instead of $1.25M.
A 57-year-old Surrey precision machining company owner. Twenty-two years of building the operation from a two-person job shop to a 45-employee CNC facility with $2.5M on the table from a strategic acquirer. Adjusted cost base: $200,000 (original incorporation costs plus equipment contributions). Capital gain: $2,300,000. The question: “How much of this $2.5M actually lands in my account — and what decisions change the number?” The answer sits at the intersection of four branching paths, each with six-figure consequences. Start with the 2026 Canadian capital gains framework to understand the base rules, then follow the decision tree below to your specific branch.
At $2.5M, this is not a simple LCGE-shelters-everything story. The ~$1.25M lifetime exemption covers roughly half the gain. The other half hits BC's 53.50% top combined rate. Your after-tax outcome ranges from $2,219,000 (best realistic case with LCGE + reserve) to $1,885,000 (no LCGE, lump sum, full exposure). That is a $334,000 decision range — and the branches below determine where you land.
Decision Branch 1: Do Your Shares Qualify as QSBC?
This is the $334,000 fork. If your manufacturing corporation's shares qualify as QSBC under ITA s. 110.6, the LCGE shelters ~$1.25M of your $2.3M capital gain. If they don't, the entire gain is exposed. Here is the math for each path:
Path A: QSBC-qualified share sale, BC resident
- Sale price: $2,500,000
- Adjusted cost base: $200,000
- Capital gain: $2,300,000
- LCGE shelter: ~$1,250,000
- Exposed gain: $1,050,000
- Taxable income (50% inclusion): $525,000
- Tax at BC top combined 53.50%: ~$280,875
- After-tax proceeds: ~$2,219,000
Path B: Non-qualifying shares (no LCGE), BC resident
- Sale price: $2,500,000
- Adjusted cost base: $200,000
- Capital gain: $2,300,000
- LCGE shelter: $0
- Exposed gain: $2,300,000
- Taxable income (50% inclusion): $1,150,000
- Tax at BC top combined 53.50%: ~$615,250
- After-tax proceeds: ~$1,885,000
The LCGE gap: $334,000. The three QSBC tests under ITA s. 110.6 that determine which path you're on:
- 90% active-business asset test (at disposition): At the time of sale, at least 90% of the corporation's assets must be used in an active business. For manufacturing, active assets include CNC machines, tooling, raw material inventory, work-in-progress, accounts receivable, and working-capital cash. Non-active assets: excess cash in GICs, passive investment portfolios, intercompany loans, and — critically — any real property not used directly in the manufacturing operation.
- 50% active-business asset test (24-month lookback): More than 50% of assets must have been in active business for the 24 months before the sale. This catches owners who purified recently but held passive assets for years.
- 24-month personal holding period: You must have personally held the shares for at least 24 months. Shares held by a holding company require separate analysis (see Branch 4 below).
Where manufacturing company owners get caught on the 90% test
A Langley CNC shop owner ran a profitable operation for 18 years. The corporation held $3.8M in total assets: $1.4M in equipment and tooling, $600K in inventory and receivables, $300K of working-capital cash — and $1.5M sitting in a high-interest savings account and a small stock portfolio from years of strong margins. Active ratio: 60%. The 90% test fails by a wide margin. The owner assumed the retained earnings were “business money” — CRA's position is clear: surplus cash beyond working-capital needs is a passive asset. Fix: pay dividends of roughly $1.2M to restore the active ratio above 90%. At BC's eligible dividend tax rate, the purification costs approximately $180K in personal tax. Cost of losing the LCGE: $334K. The dividend path is cheaper — but the 24-month lookback means the purification must happen at least 2 years before the sale closes.
Decision Branch 2: Share Sale vs. Asset Sale
The LCGE applies only to shares sold by an individual. If the buyer acquires the manufacturing company's assets (equipment, inventory, customer contracts, goodwill) instead of buying your shares, the corporation realizes the gain internally. You extract proceeds as a dividend — taxed at the eligible dividend rate, with no LCGE.
In BC, an asset sale has an additional sting: Provincial Sales Tax. BC charges 7% PST on tangible personal property transfers, including manufacturing equipment, machinery, tools, and vehicles. On a manufacturing company with $800K of equipment, that is $56,000 of PST payable by the buyer — a cost that usually gets reflected in a lower purchase price or kills the deal.
| Factor | Share Sale | Asset Sale |
|---|---|---|
| LCGE available | Yes (~$1.25M shelter) | No |
| Tax on $2.3M gain (BC) | ~$281K (with LCGE) | ~$615K+ (corp tax + dividend extraction) |
| BC PST on equipment | Not applicable (no asset transfer) | 7% on equipment (~$56K on $800K) |
| GST on transfer | Not applicable (shares are exempt) | 5% unless joint election filed (ITA s. 167) |
| Buyer preference | Less preferred (inherits all liabilities) | Preferred (CCA step-up on equipment + goodwill) |
| Environmental liability | Buyer inherits (major concern for manufacturing) | Stays with seller's corporation |
| After-tax proceeds to seller | ~$2,219,000 | ~$1,885,000 or less |
Manufacturing buyers often push for asset deals specifically to avoid inheriting environmental liabilities — contaminated soil, hazardous waste obligations, or WorkSafeBC claims. On a $334K+ tax spread, the negotiation is worth having. Many deals settle on a share sale with a comprehensive indemnification clause and environmental insurance, preserving the LCGE for the seller while protecting the buyer.
Decision Branch 3: Lump Sum vs. 5-Year Capital Gains Reserve
The LCGE covers ~$1.25M of your $2.3M gain. The remaining $1.05M is exposed regardless. The question: does that exposed $1.05M hit your tax return in one year, or spread across five?
Under ITA s. 40(1)(a)(iii), if the buyer pays in installments (vendor take-back note, earnout, or staged payments), you spread the gain over up to 5 years, recognizing at least 20% per year. On $525,000 of taxable income (the exposed portion at 50% inclusion), the reserve makes a meaningful difference:
Worked example: Lump sum vs. 5-year reserve on $525K taxable (BC, exposed gain after LCGE)
Option A: Lump sum (all $525K in Year 1)
$525K taxable income + $120K other income = $645K total → deep into BC's 53.50% top bracket
Tax on capital gains portion: ~$280,875
Option B: 5-year reserve ($105K taxable per year)
Year 1: $105K taxable + $120K other income = $225K → ~$46,700 tax on gain portion
Year 2: $105K taxable + $40K (post-sale, reduced income) = $145K → ~$38,200
Year 3: $105K + $40K = $145K → ~$38,200
Year 4: $105K + $40K = $145K → ~$38,200
Year 5: $105K + $40K = $145K → ~$38,200
Total reserve tax: ~$199,500
Lump sum tax: ~$280,875
Savings from reserve: ~$81,375
The reserve requires the buyer to actually pay over time. You cannot take a $2.5M lump-sum cheque and claim a 5-year reserve. Structure the purchase agreement with a vendor take-back note, earnout tied to customer retention or production targets, or staged payments. Many manufacturing acquisitions already include 12–36 month transition periods with holdback provisions that naturally qualify for reserve treatment.
Decision Branch 4: Personal Shares vs. Holding Company
This branch trips up manufacturing owners more than any other. Many incorporated manufacturers set up a holding company (holdco) years ago — either for creditor protection, real-estate holding, or income splitting. The LCGE requires shares held by an individual personally for at least 24 months. If your manufacturing opco is owned by a holdco, the path forks again:
Sub-branch 4A: Holdco shares qualify as QSBC
If the holdco's assets are primarily (90%+) the opco shares, and the opco itself meets the active-business test, the holdco shares can qualify as QSBC shares. The LCGE applies to the gain on the holdco shares. This is the cleanest path — no reorganization needed.
Sub-branch 4B: Holdco owns mixed assets (passive + opco)
If the holdco also owns real estate, a passive investment portfolio, or multiple operating companies, the 90% test fails at the holdco level. Options: (1) purify the holdco by distributing non-active assets before the sale (24-month lookback applies), or (2) reorganize to move opco shares to personal ownership under ITA s. 85 rollover — but the 24-month holding period restarts on the new personal shares.
Sub-branch 4C: Manufacturing facility owned by holdco separately
A common structure: the holdco owns the manufacturing building and leases it to the opco. The building is a passive asset at the holdco level (unless it qualifies as used in active business of a connected corporation). If the buyer doesn't want the real estate, the holdco shares now have a non-active asset that may blow the 90% test. This is where pre-sale restructuring gets complex — and where a tax accountant experienced with BC manufacturing transactions earns their fee.
LCGE Multiplication: Sheltering the Full $2.3M Gain
Each individual Canadian resident has their own ~$1.25M LCGE. On a $2.5M sale, one owner shelters $1.25M and pays tax on the rest. Two shareholders each claiming LCGE can shelter $2.5M combined — potentially reducing the exposed gain to zero.
The mechanics: a share reorganization (typically ITA s. 86 capital reorganization or s. 85 rollover) issues new shares to your spouse or adult children. Each must hold their shares for at least 24 months before the sale. Each must have unused LCGE room. On a $2.5M sale split between two shareholders:
LCGE multiplication: 2 shareholders vs. 1
| Scenario | Gain sheltered | Exposed gain | Tax (BC, 53.50%) | After-tax |
|---|---|---|---|---|
| 1 shareholder | $1.25M | $1.05M | ~$281K | ~$2,219K |
| 2 shareholders | $2.5M | $0 | $0 | ~$2,500K |
Savings from LCGE multiplication: ~$281,000
CRA scrutinizes LCGE multiplication aggressively. The anti-avoidance provisions in ITA s. 74.4 (attribution on transfers to a related corporation) and the general anti-avoidance rule (GAAR, s. 245) can apply if the primary purpose of the share transfer is LCGE multiplication. The 24-month holding period is the minimum — in practice, CRA expects the second shareholder to have a genuine economic interest in the business. A spouse who has never been involved and receives shares 25 months before a pre-arranged sale is a red flag.
BC vs. Other Provinces: What the $525K Exposed Gain Costs You
When the LCGE partially shelters the gain, province of residence determines the rate on the exposed $525K of taxable income. CRA determines province of residence based on where your most significant residential ties are on the date of disposition — not where the factory is located.
| Province | Top Combined Rate | Approx. Tax on $525K Taxable | After-Tax ($2.5M sale) |
|---|---|---|---|
| British Columbia | 53.50% | ~$280,875 | ~$2,219,000 |
| Ontario | 53.53% | ~$281,000 | ~$2,219,000 |
| Quebec | 53.31% | ~$279,900 | ~$2,220,000 |
| Alberta | 48.00% | ~$252,000 | ~$2,248,000 |
| Saskatchewan | 47.50% | ~$249,375 | ~$2,250,625 |
BC, Ontario, and Quebec are within $2,000 of each other on the same exposed gain. The meaningful spread is between BC/ON/QC and the prairie provinces: approximately $30,000 on the exposed portion alone. Don't move provinces for $30K — but if you're already planning a post-sale relocation, timing the move before the closing date matters.
The Estate Freeze Alternative: Should You Have Done This 3 Years Ago?
An estate freeze under ITA s. 86 locks the current owner's share value at today's fair market value and issues new growth shares to the next generation. If the Surrey manufacturing company was worth $1.5M three years ago and is now worth $2.5M, a freeze done at $1.5M would have:
- Frozen the parent's deemed gain at $1.3M ($1.5M minus $200K ACB) — fully within LCGE
- Put the $1M of subsequent growth on the children's shares — each child claims their own LCGE on that growth
- Combined result: potentially $0 capital gains tax on the entire $2.5M sale
Without the freeze, one owner faces $281K of tax on the portion the LCGE can't reach. This is the most common six-figure “I wish I'd known” in manufacturing business sales. The freeze doesn't restrict your control or income — you retain preferred shares with full voting rights and dividend entitlement. It just shifts future appreciation onto the next generation's tax bill.
Rule of thumb: any incorporated manufacturing business owner over 55 in BC should have evaluated an estate freeze. Most haven't.
Pre-Sale Planning Timeline for BC Manufacturing Owners
The QSBC qualification window and LCGE multiplication both require years of lead time, not months. Here is the realistic timeline for a $2.5M manufacturing exit:
36+ months before sale: Evaluate estate freeze. If business value is within LCGE range now but growing, freeze today to lock the gain at a sheltered level. Consider LCGE multiplication: issue shares to spouse or adult children under s. 86 capital reorganization. The 24-month holding clock starts here.
24+ months before sale: Review corporate balance sheet for excess cash. If non-active assets exceed 10%, begin purification (dividends to owner, equipment buyouts). The 50% lookback test starts from this point. If holdco structure exists, evaluate whether opco shares need restructuring.
12 months before sale: Confirm 90% active-asset ratio is on track. Engage a tax accountant experienced with manufacturing transactions in BC. Review environmental liabilities that affect share-vs-asset negotiation. Determine buyer's structural preference.
6 months before sale: Lock share-sale structure in LOI. Prepare GST joint election documentation (ITA s. 167) if asset components are part of the deal. Confirm QSBC status with formal opinion letter. Structure payment terms to qualify for 5-year reserve if exposed gain exists.
At closing: File LCGE claim on Schedule 3 of the T1 return. Report capital gains reserve on Schedule 3 (if applicable). Ensure purchase price allocation is consistent between buyer and seller for CRA. Confirm BC PST exemption (share sale) or remittance (asset sale) with provincial authorities.
Your Next Step Depends on Which Branch Matched You
The decision tree has four branches, and each one changes the after-tax outcome by $80,000 to $334,000. Here is the summary:
- Branch 1 (QSBC qualification): If your shares qualify, you save $334,000 on a $2.5M sale. If they don't, purification may cost $180K in dividend tax but save $334K in LCGE benefit. Start the 24-month clock now if you haven't.
- Branch 2 (Share vs. asset sale): A share sale preserves LCGE + avoids $56K+ of BC PST. Push for share structure and address the buyer's environmental concerns through indemnification and insurance.
- Branch 3 (Reserve vs. lump sum): If the exposed gain is $1.05M+, a 5-year reserve saves approximately $81,000 through bracket arbitrage. Structure the purchase agreement with staged payments or a vendor take-back note.
- Branch 4 (Holdco vs. personal): If your opco sits inside a holdco with passive assets, you may need a reorganization — and 24 months of runway to qualify the new shares.
The manufacturing company sale at $2.5M in BC is not a single-variable problem. The branches interact: a holdco that fails the 90% test also fails LCGE multiplication. An asset sale that loses LCGE also triggers PST. Get the structure wrong on one branch and the cascading cost is six figures.
Frequently Asked Questions
Q:How much tax do I pay on selling a $2.5M manufacturing company in BC in 2026?
A:With QSBC-qualifying shares and full unused LCGE room: approximately $280,875 in capital gains tax. The $2.3M capital gain ($2.5M sale minus $200K ACB) is partially sheltered by the ~$1.25M LCGE. The remaining $1.05M of exposed gain at 50% inclusion produces $525,000 of taxable income. At BC’s top combined federal + provincial rate of 53.50%, the tax is approximately $280,875. Without QSBC qualification, the full $2.3M gain is exposed, producing ~$615,250 in tax. The inclusion rate is a flat 50% in 2026 — the proposed 66.67% rate was cancelled March 21, 2025.
Q:Does a manufacturing company qualify for the LCGE in British Columbia?
A:Yes — manufacturing is an active business under the Income Tax Act. The shares of a Canadian-controlled private corporation (CCPC) that operates a manufacturing business can qualify as QSBC shares under ITA s. 110.6. All three tests must pass: 90% of assets in active business at disposition, 50%+ active-business assets for the prior 24 months, and 24-month personal holding period. Manufacturing companies commonly fail the 90% test when they hold excess cash from profitable years, own passive investment portfolios inside the corporation, or have real property (the manufacturing facility) held outside the operating company.
Q:Should I sell my manufacturing company as a share sale or asset sale in BC?
A:For the seller, a share sale is almost always better. It is the only structure that qualifies for the $1.25M LCGE. On a $2.5M manufacturing sale, the LCGE saves approximately $334,000 compared to a fully taxable scenario. An asset sale also triggers BC Provincial Sales Tax (PST) at 7% on equipment and machinery transfers — on $800K of manufacturing equipment, that is $56,000 of additional tax the share sale avoids entirely. The buyer typically prefers an asset deal for CCA step-up purposes. The $334K+ spread often justifies a 3–5% price adjustment to make the share deal work for both sides.
Q:Can I multiply the LCGE by adding family members as shareholders before selling?
A:Yes, but only with proper planning at least 24 months before the sale. Each individual Canadian resident has their own ~$1.25M LCGE. If your spouse or adult children hold QSBC shares for 24+ months before the sale, each can claim their own LCGE on their portion of the gain. On a $2.5M sale, two shareholders could potentially shelter $2.5M of combined gain — reducing the exposed gain to zero. This requires a share reorganization (often under ITA s. 86 or s. 85), and the 24-month holding-period clock restarts on the new shares. CRA actively scrutinizes last-minute share transfers under the anti-avoidance rules in ITA s. 74.4. Plan early.
Q:How does the capital gains reserve work on a $2.5M manufacturing sale?
A:Under ITA s. 40(1)(a)(iii), if the buyer pays over multiple years (installment payments, earnout, or vendor take-back note), you can spread recognition of the capital gain over up to 5 years, recognizing at least 20% per year. On the $525K of taxable income from the exposed portion of a $2.5M sale (after LCGE), spreading $105K/year across 5 years instead of $525K in one year can save $40,000–$80,000 through bracket arbitrage in BC. Many manufacturing acquisitions include earnout provisions tied to customer retention or production targets that naturally qualify for reserve treatment.
Q:What is BC PST exposure on a manufacturing company asset sale?
A:British Columbia charges 7% Provincial Sales Tax on the purchase price of tangible personal property, including manufacturing equipment, machinery, tools, and vehicles. On a $2.5M manufacturing company with $800K of equipment, an asset sale triggers approximately $56,000 of PST payable by the buyer. This cost is often reflected in a lower purchase price or becomes a negotiation point. A share sale avoids PST entirely because no assets change hands — only the shares of the corporation that owns them. Real property transfers also trigger BC Property Transfer Tax at 1–3% of fair market value.
Question: How much tax do I pay on selling a $2.5M manufacturing company in BC in 2026?
Answer: With QSBC-qualifying shares and full unused LCGE room: approximately $280,875 in capital gains tax. The $2.3M capital gain ($2.5M sale minus $200K ACB) is partially sheltered by the ~$1.25M LCGE. The remaining $1.05M of exposed gain at 50% inclusion produces $525,000 of taxable income. At BC’s top combined federal + provincial rate of 53.50%, the tax is approximately $280,875. Without QSBC qualification, the full $2.3M gain is exposed, producing ~$615,250 in tax. The inclusion rate is a flat 50% in 2026 — the proposed 66.67% rate was cancelled March 21, 2025.
Question: Does a manufacturing company qualify for the LCGE in British Columbia?
Answer: Yes — manufacturing is an active business under the Income Tax Act. The shares of a Canadian-controlled private corporation (CCPC) that operates a manufacturing business can qualify as QSBC shares under ITA s. 110.6. All three tests must pass: 90% of assets in active business at disposition, 50%+ active-business assets for the prior 24 months, and 24-month personal holding period. Manufacturing companies commonly fail the 90% test when they hold excess cash from profitable years, own passive investment portfolios inside the corporation, or have real property (the manufacturing facility) held outside the operating company.
Question: Should I sell my manufacturing company as a share sale or asset sale in BC?
Answer: For the seller, a share sale is almost always better. It is the only structure that qualifies for the $1.25M LCGE. On a $2.5M manufacturing sale, the LCGE saves approximately $334,000 compared to a fully taxable scenario. An asset sale also triggers BC Provincial Sales Tax (PST) at 7% on equipment and machinery transfers — on $800K of manufacturing equipment, that is $56,000 of additional tax the share sale avoids entirely. The buyer typically prefers an asset deal for CCA step-up purposes. The $334K+ spread often justifies a 3–5% price adjustment to make the share deal work for both sides.
Question: Can I multiply the LCGE by adding family members as shareholders before selling?
Answer: Yes, but only with proper planning at least 24 months before the sale. Each individual Canadian resident has their own ~$1.25M LCGE. If your spouse or adult children hold QSBC shares for 24+ months before the sale, each can claim their own LCGE on their portion of the gain. On a $2.5M sale, two shareholders could potentially shelter $2.5M of combined gain — reducing the exposed gain to zero. This requires a share reorganization (often under ITA s. 86 or s. 85), and the 24-month holding-period clock restarts on the new shares. CRA actively scrutinizes last-minute share transfers under the anti-avoidance rules in ITA s. 74.4. Plan early.
Question: How does the capital gains reserve work on a $2.5M manufacturing sale?
Answer: Under ITA s. 40(1)(a)(iii), if the buyer pays over multiple years (installment payments, earnout, or vendor take-back note), you can spread recognition of the capital gain over up to 5 years, recognizing at least 20% per year. On the $525K of taxable income from the exposed portion of a $2.5M sale (after LCGE), spreading $105K/year across 5 years instead of $525K in one year can save $40,000–$80,000 through bracket arbitrage in BC. Many manufacturing acquisitions include earnout provisions tied to customer retention or production targets that naturally qualify for reserve treatment.
Question: What is BC PST exposure on a manufacturing company asset sale?
Answer: British Columbia charges 7% Provincial Sales Tax on the purchase price of tangible personal property, including manufacturing equipment, machinery, tools, and vehicles. On a $2.5M manufacturing company with $800K of equipment, an asset sale triggers approximately $56,000 of PST payable by the buyer. This cost is often reflected in a lower purchase price or becomes a negotiation point. A share sale avoids PST entirely because no assets change hands — only the shares of the corporation that owns them. Real property transfers also trigger BC Property Transfer Tax at 1–3% of fair market value.
This Is the Kind of Decision Where a Fee-Only CFP Can Pay for Itself in Tax Savings Alone
Life Money's advisors offer a flat-fee 90-minute consultation that walks through your specific numbers — sale price, ACB, QSBC qualification status, holdco structure, share-vs-asset negotiation, and the reserve decision. On a $2.5M manufacturing sale in BC, the gap between the right structure and the wrong one is $334,000+.
Book a Consultation →Sources: ITA s. 110.6 (LCGE on QSBC shares, ~$1.25M indexed for 2026), ITA s. 40(1)(a)(iii) (capital gains reserve, 5-year spread), ITA s. 86 (capital reorganization / estate freeze), ITA s. 167 (GST joint election on going-concern transfers), ITA s. 74.4 (attribution on transfers to related corporation), ITA s. 245 (GAAR). Capital gains inclusion rate: flat 50% for 2026 (proposed 66.67% rate cancelled March 21, 2025 — PMO release, Dept of Finance deferral Jan 31 2025). BC top combined marginal rate: 53.50% (federal 33% + BC 20.50%). BC PST: 7% on tangible personal property (BC Provincial Sales Tax Act). Alberta top rate: 48.00%. Saskatchewan top rate: 47.50%. Ontario top rate: 53.53%. Quebec top rate: 53.31%.
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