Regarding transactions (including non-arm’s length transactions) to crystalize accrued capital gains prior to June 25, 2024, CRA, after referring to the proposed amendments to s. 245, stated:
That being said, we are cognizant of the fact that the 2024 Federal Budget does not contain any limits on the eligibility of capital gains for the current inclusion rate where such gains are realized prior to June 25, 2024 and that the delay in the implementation of the increased inclusion rate is a deliberate policy choice. In light of this and subject to our comments below, it is our view that where a taxpayer crystallizes an accrued capital gain prior to the increase in the capital gains inclusion rate, the GAAR would generally not apply to redetermine the inclusion rate in respect of the crystallized capital gain.
CRA then indicated that GAAR scrutiny might be merited where tax benefits were engaged in addition to avoiding the increased inclusion rate, for example, surplus-stripping transactions.