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Qualified Fishing Property - Lifetime Capital Gains Exemption (LCGE)
Income Tax Act s. 110.6(1), s. 110.6(1.2), s. 110.6(2.2)
Qualified Fishing Property Definition
Property Used in a Fishing Business - Conditions
Canada Revenue Agency (CRA) Resources
How Much Is The Exemption?
An individual who owns qualified fishing property may be able to claim a $1,000,000+ lifetime capital gains exemption (LCGE) when the property is sold. The actual capital gains deduction is 50% of the capital gains exemption.
For annual maximums, see the Lifetime Capital Gains Exemption article.
Qualified Fishing Property Definition
Income Tax Act s. 110.6(1)
Qualified fishing property of an individual includes property owned by:
 | the individual, |
| the spouse or common-law partner of the individual, or |
| a partnership, an interest in which is an interest in a family fishing partnership of the individual or his/her spouse or common-law partner. |
The qualified fishing property can be:
(a) real or immovable property or a fishing vessel that was used in the course of carrying on the business of fishing in Canada by:
(i) the individual,
(ii) if the individual is a personal trust, a beneficiary of the trust that is entitled to receive directly from the trust any income or capital of the trust,
(iii) a spouse, common-law partner, child or parent of a person referred to in (i) or (ii),
(iv) a corporation, a share of the capital stock of which is a share of the capital stock of a family fishing corporation of an individual referred to in any of (i) to (iii), or
(v) a partnership, an interest in which is an interest in a family fishing partnership of an individual referred to in any of (i) to (iii),(b) a share of the capital stock of a family fishing corporation of the individual or the individual's spouse or common-law partner,
(c) an interest in a family fishing partnership of the individual or the individual's spouse or common-law partner, or
(d) an eligible capital property used by a person or partnership referred to in any of (a) (i) to (v) above, or by a personal trust from which the individual acquired the property, in the course of carrying on the business of fishing in Canada.
Property Used in a Fishing Business - Conditions
Income Tax Act s. 110.6(1.3)
There are rules about the period of ownership and the use of property owned by an individual, the spouse or common-law partner of the individual, or a partnership, an interest in which is an interest in a family fishing partnership of the individual or of the individual's spouse or common-law partner, in order to meet the qualified fishing property requirements:
(a) throughout the 24 month period immediately preceding the disposition of the property, the property must have been owned by one or more of
(i) the individual, or a spouse, common-law partner, child or parent of the individual,
(ii) a partnership, an interest in which is an interest in a family fishing partnership of the individual or of the individual's spouse or common-law partner,
(iii) if the individual is a personal trust, the individual from whom the trust acquired the property or a spouse, common-law partner, child or parent of that individual, or
(iv) a personal trust from which the individual or a child or parent of the individual acquired the property;
and (b) one of the following requirements must also be met:
(i) in at least 2 years while the property was owned by the one or more persons or partnerships referred to in (a) immediately above,
(A) the gross revenue earned from the fishing business by one of the persons referred to in (a) for the period during which the property was owned by a person referred to in (a) exceeded the income of that person from all other sources for that period, and
(B) the property was used principally in a fishing business carried on in Canada in which an individual referred to in (a), or where the individual is a personal trust, a beneficiary of the trust, was actively engaged on a regular and continuous basis, or
(ii) throughout a period of at least 24 months while the property was owned by one or more persons or partnerships referred to in (a), the property was used in a fishing business, in which an individual referred to in any of subparagraphs (a) (i) to (iii) in the s. 110.6(1) definition of "qualified fishing property", was actively engaged on a regular and continuous basis, by a
| partnership referred to in s. 110.6(1)(a)(iv) definition of "qualified fishing property", or |
| corporation referred to in s. 110.6(1)(a)(v) definition of "qualified fishing property" |
TaxTips.ca Resources
Lifetime Capital Gains Exemption / Alternative Minimum Tax / Intergenerational Transfers
Canada Revenue Agency (CRA) Resources
T4002 Self-employed Business, Professional, Commission, Farming and Fishing Income Guide
Line 25400 (line 254 prior to 2019) - Capital gains deduction
Tax Tip: This is complicated and can save more than $200,000 in taxes - do it right, plan ahead, and get professional advice!
Revised: December 12, 2023