You can trigger Canadian tax on departure even when no asset was actually sold.
Did you know.
When you leave Canada and become a non-resident, Canada can treat certain assets as though they were sold at fair market value on departure. This is the deemed disposition regime commonly referred to as departure tax.
What it means for you
This catches people off guard because they assume tax only arises if they actually liquidate investments before leaving. But the departure itself can become the tax event. If you own appreciated investments, private company shares, or other taxable property subject to the rules, you may be treated as having disposed of them even though you still hold them.
That means you may need to deal with departure reporting forms such as:
- Form T1161 — listing certain property owned when leaving Canada
- Form T1243 — reporting the deemed disposition
- and, where applicable, Form T1244 — if you elect to defer payment of departure tax by providing security to the CRA
So even if nothing was sold, the departure year can still create a real filing and tax burden.
Planning insight
The move itself can be the taxable event. Before becoming a non-resident, review which assets may be exposed, what reporting forms may be required, and whether any deferral or restructuring options should be considered before the move date.