Tax Guide/Corporate tax
Lifetime capital gains exemption
Updated November 4, 2026
When you sell qualifying small business shares, or qualifying farm or fishing property, the lifetime capital gains exemption can shelter part of your gain. The CRA's published amount for 2026 is $1,275,000.
Tests for small business shares
The rules are detailed, but generally:
- At sale: about 90% of the company's assets are used in active business in Canada.
- For 24 months before: more than 50% of assets met that test, and the shares were held only by you or related people.
Investments building up inside the company can put this at risk.
Using the exemption can also trigger alternative minimum tax, and it can affect net-income-based benefits. Plan well before a sale.