Exemption of Small Gains
23.61. For ease of administration it is necessary to have some provisions for exempting small gains from tax. While it would be desirable to express this in the form of an exemption for gains not exceeding a certain amount in any one year, overseas experience indicates that such an approach is not satisfactory since it necessitates the computation of the actual gain in order to determine whether or not the exemption applies. For this reason the Committee recommends that an alternative method be adopted and that the exemption apply to the gains arising from the sale in any one year of assets where the total proceeds of sale do not exceed a certain figure, say $1,000. Although this may involve some inequity in that the exempted gain could be $1 or $999, it is felt that in practice the inequities will be slight and will be greatly outweighed by the administrative simplicity of the recommendation.
23.62. The Budget proposals contained no general provisions exempting small gains from capital gains tax. Having regard to the administrative difficulty for both taxpayer and revenue authorities involved in assessing tax on small capital gains, the wisdom of this is questionable. The Committee has been particularly impressed by evidence from the United Kingdom on the difficulties involved in assessing small capital gains and believes that the loss of equity involved in the provisions suggested in the previous paragraph is small compared with the gains in simplicity and ease of administration.