The lifetime capital gains exemption for qualified small business corporation shares is roughly $1,275,000 for 2026 — the $1,250,000 base from Budget 2024, indexed. The capital gains inclusion rate stayed at 50%: the proposed increase to 66.67% was deferred in January 2025 and cancelled in March 2025. The Canadian Entrepreneurs’ Incentive was never enacted and the 2025 federal budget confirmed it will not proceed. After three years of moving targets, the planning picture is settled.

Qualification is where the work is, and it takes time: a Canadian-controlled private corporation; at least 90% of asset value in active business use at the moment of sale; more than 50% throughout the preceding 24 months; and 24 months’ ownership by you or a related person. The test that catches software companies is the 90% one — accumulated cash and passive investments sitting on the balance sheet are not active-business assets.