What Budget 2026 could mean for law firms and lawyers: a full write-off for equipment and software, no access to the new startup capital gains exemption, and no new trust accounting rules that we have found so far.
Federal Budget 2026 for lawyers and law firms
- Equipment and software: the Productivity Mega Deduction is meant to cover office technology and software. Computers, practice management systems and similar spending could be written off right away. Confirm what qualifies before you buy.
- Not included in the new startup exemption: the Canada Growth Incentive excludes a “professional practice of an accountant, lawyer, notary” and any business whose main asset is the reputation or skill of its people. A law firm’s shares would not qualify.
- Professional corporations and partners: the single annual instalment option for business and professional income (from 2028), the higher $7,500 instalment threshold, and the May 15 filing date for individuals (from the 2027 tax year) could all affect how you plan cash and deadlines.
- Individual pension plans (IPPs): if you or your professional corporation has an IPP, the budget tightens the rules. From January 1, 2028, an IPP whose assets exceed 200% of its pension liabilities would become a “revocable plan”, and a CRA revocation would carry a 10% special tax. Ask us how your plan is funded.
- Disputes with the CRA: the longer window to object to an assessment, and the credit bureau disclosure rules, are worth knowing if you advise clients with tax debts.
- Trust accounts: in our first read we did not find new measures aimed at trust accounting or Law Society trust reporting. Your existing rules and the Law Society deadlines do not change because of this budget. We will flag anything we find in the financial-crime chapter.
- Courts: small funding for the Courts Administration Service to reduce the Federal Court translation backlog and manage caseloads.
See also our guides on law firm trust accounting and the Law Society trust report, and our law firm accounting page.
More on Budget 2026
- Budget 2026 hub: summary, key numbers and dates
- For business owners
- For lawyers and law firms
- For doctors, dentists and clinics
- For individuals and families
- The official budget at budget.canada.ca
Key takeaway: What helps law firms (the equipment write-off), what excludes them (the startup capital gains exemption), and what did not change (trust accounting).
Official sources
- Budget 2026: Masters of our destiny (budget.canada.ca)
- Department of Finance Canada
- Canada Revenue Agency
Reviewed . This is general information, not legal or tax advice. Rules and rates change, so confirm current requirements with the official sources above and speak to the firm about your situation.
Prepared by HJ Wu & Company Inc. (CPA), led by Amy Wu, CPA, CGA, CPA (ND), MBA, BSc. General information only, not personal advice. How the guides are written and reviewed.
Talk to HJ Wu & Company Inc.
Phone: 604-636-1862
Email: inquiry@hjwucpa.com
512 - 938 Howe Street, Vancouver