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    Thursday, February 22, 2018

The Farm and Small Business Capital Gains Tax Credit is a measure introduced as part of the reform of the provincial income tax system in 2001.  The tax credit is therefore applicable to capital gains arising from dispositions that take place in the 2001 and subsequent taxation years.

The credit is intended to apply Saskatchewan's lowest statutory tax rate to eligible taxable capital gains in excess of the capital gains deduction.  The eligible capital gains must have arisen from the disposition of "qualified farm property" or "qualified small business corporation shares".  The tax credit is only allowed for these types of capital gains.

The tax credit effectively removes the eligible capital gain from an individual's income and recalculates the provincial income tax payable with the capital gain taxed at the lowest provincial statutory tax rate.

To claim this tax credit on your Saskatchewan income tax return you will need to use Form 1237, which can be obtained from the Canada Revenue Agency.

Related Links

Form 1237

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