The lifetime capital gains exemption on qualified small business corporation shares is $1,275,000 for 2026, up from $1,250,000 in 2025 and indexed annually. The capital gains inclusion rate is still 50%: the proposed 66.67% rate was deferred on 31 January 2025 and cancelled on 21 March 2025.

But the exemption is gated by tests measured over time, not at the moment you want them:

• At least 90% of the corporation’s asset value in active business assets used primarily in Canada, at the time of sale.
• At least 50% of assets so used throughout the 24 months before the sale.
• No unrelated person owning the shares at any point in those 24 months — which reorganisations and new share issuances can quietly break.

Surplus cash, passive investments and rental property count against you. “Purification” — moving those out to a holding company on a tax-deferred rollover — takes time, and the standard advice is to begin at least two years before any contemplated sale. This is the Skydance record date in domestic clothing: if cash has piled up in the operating company, you are on the wrong side of a 24-month clock that has not started running.