Swift Accounting & Business Solutions Ltd.
2440 Kensington Rd NW, Calgary, AB T2N 3S1
(403) 999-2295 · mailbox@swiftltd.ca
·
Capital Gains: Personal vs Corporate Calculator (2026)
See the tax on a capital gain taken personally and the same gain realized in your corporation and paid out. Enter the gain and your other income.
Enter the capital gain to compare the two routes.
| Step | Personal | Corporation |
|---|
Cash left in the corporation
- Refundable tax that comes back with dividends
Cash in your hands, personal route
- Personal tax paid on the gain
Assumes the gain is investment income in a Canadian-controlled private corporation that pays it out as a non-eligible dividend this year. Capital losses are not included.
Estimate based on 2026 rules. Not tax advice.
How it's calculated
- Personal: the taxable part of the gain (50%) is added to your other income. The tax is the increase in your total federal and provincial tax.
- Corporation: the taxable part is taxed at the federal investment income rate plus your province's rate. About 30.67% of that income is refundable tax.
- The untaxed part of the gain goes to the capital dividend account and is paid out tax-free.
- The rest is paid as a non-eligible dividend on top of your other income. Refundable tax comes back at 38.33% of each taxable dividend paid, up to the balance.
- Taxable gains over $50,000 in the corporation cut next year's small business limit by $5 for each $1 over.
Frequently asked questions
Is it cheaper to realize a capital gain personally or in a corporation?
If you pay out all the cash straight away, the personal route usually costs less, because part of the corporate tax is never refunded. A corporation helps when you leave the money invested there, since personal tax is deferred. Your other income changes the size of the gap, so enter yours.
What is the capital dividend account?
It is a tax-free pool a corporation builds from the untaxed part of a capital gain. The corporation can pay it to shareholders as a capital dividend with no personal tax after it files an election with the CRA.
Does the lifetime capital gains exemption apply inside a corporation?
No. Only individuals can claim it, and only on qualifying small business shares and farm or fishing property. This calculator does not apply it. The section 85 calculator shows how it works on a share transfer.
How does a gain in the corporation affect the small business limit?
The taxable part of the gain counts as passive investment income. Above $50,000 in a year, the small business limit shrinks by $5 for each $1 over, starting the next year. The calculator shows the limit drop and, with next year's active income entered, the extra tax.
What does this calculator leave out?
It leaves out capital losses, alternative minimum tax, other investment income in the corporation and the tax on split income for family shareholders. Get advice before you realize a large gain.
Talk to a Swift accountant
Selling an asset through your corporation? A Swift accountant can check your numbers and the filing.