
Tax Strategies for Leaving Canada ๐จ๐ฆ
Residency Status for Tax Purposes ๐ก
Canada’s tax system is based on residency, not citizenship. If you leave permanently, you might be deemed a non-resident. It’s important to maintain significant ties like a home, spouse, dependents, or bank accounts to remain a resident for tax purposes.
Departure Tax (Deemed Disposition) ๐ผ
When you leave Canada, certain assets are considered disposed of at fair market value, potentially triggering capital gains tax.
๐ Exemptions:
- Canadian real estate (taxed upon sale).
- RRSPs, RRIFs, pensions (taxed normally).
Filing a Final Tax Return ๐
In the year of departure, file a final tax return as a resident. It’s essential to report any departure tax liabilities and complete Form T1243 (Deemed Disposition) and T1161 (Properties over $25,000 CAD) if needed.

Future Taxation as a Non-Resident ๐
- Canadian-source income (rent, dividends, pensions) is subject to non-resident withholding tax, usually 25%, but this may be reduced by a tax treaty.
- Employment income earned in Canada may still be taxable.
RRSPs and Pensions ๐ณ
RRSP withdrawals are subject to a 25% withholding tax, which can be lower under some tax treaties. Canadian pensions (CPP, OAS, private pensions) are taxable, dependent on the new countryโs treaty with Canada.
Other Considerations ๐
Principal Residence: If you plan to sell your home after leaving, you may forfeit the principal residence exemption.
TFSA & RESP: While tax-free in Canada, these accounts may be taxed by your new country.
Foreign Reporting: Your new country may require the declaration of former Canadian assets.
Consult a Professional: If you’re planning to leave, consider consulting a tax professional to minimize liabilities and ensure compliance. We’re here to help with specific tax planning strategies tailored to your situation! ๐
