What is the lifetime capital gains exemption?
Short answer
It is a Canadian tax rule that can shelter part of the gain when you sell shares of a qualifying small business. Your company must meet the tests at the time of sale, and planning takes years.
What to know
- It generally applies to share sales, not asset sales.
- Excess cash or passive assets can disqualify the company.
- Family members may each be able to claim it with the right structure.
What to do next
- 1Ask your tax advisor if your company qualifies today.
- 2Review your holding structure.
- 3Start planning at least two years ahead.
Last reviewed September 2026 by the Horizon team. General information, not legal, tax or financial advice.