Leaving Canada Permanently: What's the Tax Checklist?

Six jobs, in order: sever your residential ties and document the date, inventory what you own, file Forms T1161 and T1243 with your final Canadian return, settle the RRSP and TFSA questions before you board, check CPP and OAS, and shut down the CRA benefits that assume you still live there. The final return, with your departure date on it, is due the following April 30. For the Ontario-to-Florida corridor specifically, the provincial and Florida-side calendars are in moving from Ontario to Florida. If the T1135 years were missed rather than filed, the late routes are in do I file a T1135 for my US accounts, and what if I am late.

What’s on the leaving-Canada tax checklist?

Ten rows, in the order they happen. Before the move: inventory your residential ties and plan how each one ends, pick a departure date you can prove, value everything you own on that date, and settle the RRSP and TFSA questions. With the final return: Form T1161 if reportable property tops $25,000, Form T1243 for the deemed dispositions, and the T1 itself with the departure date on it. Right after the move: check CPP and OAS, then close out the CRA benefits.

Step	When	What you file or do	Where it’s covered
1. Inventory your residential ties and plan how each one ends	Months before the move	Home, spouse and dependants, licences, health coverage	The ties table below
2. Pick your departure date and keep proof	Moving day	One-way tickets, closing statement or lease, visa activation	This page
3. Value everything you own on the departure date	Departure date	The deemed-disposition inventory	What the departure tax is
4. File Form T1161 if reportable property tops $25,000	With the final return	The reportable-property list	T1161 and T1243, with the math
5. File Form T1243 for the deemed dispositions	With the final return	The gain calculation	Same forms guide
6. Decide whether to defer the tax (Form T1244)	By your balance-due day	Optional election; security above a floor	Same forms guide
7. File the final T1 with the departure date on it	April 30, or June 15 if you carried on a business	Worldwide income up to the departure date	This page
8. Renting out the house? NR6 and section 216	Before the first rent payment	Moves withholding from gross rent to net	Form NR6 and the section 216 return
9. Settle the RRSP and TFSA questions	Before the move	Neither is deemed sold; the US side is the issue	RRSP withdrawals, TFSA as a foreign trust
10. Check CPP and OAS, then close out CRA benefits	Right after the move	Address, direct deposit, GST/HST credit, CCB	This page

How do you actually stop being a Canadian tax resident?

By severing the ties that make Canada home. The facts decide, because the Income Tax Act counts anyone “ordinarily resident” as a resident (s. 250(3)). Boarding the flight changes nothing on its own. The CRA weighs your ties in two tiers, primary and secondary (Folio S5-F1-C1).

Primary ties (any one carries serious weight)	Secondary ties (weighed as a group)
A dwelling in Canada that stays available to you	Personal property in Canada, like a car or furniture
A spouse or common-law partner still in Canada (what to do when the household doesn’t leave together)	Social and economic ties, memberships, bank accounts
Dependants still in Canada	A Canadian driver’s licence or provincial health card

If ties linger anyway, the treaty can settle it. Once you’re treaty-resident in the US, s. 250(5) deems you non-resident in Canada. The tie-breaker in Article IV(2) of the US-Canada treaty runs permanent home first, then centre of vital interests, then habitual abode, then citizenship. There’s also Form NR73 if you want the CRA’s opinion on your status; it’s optional, and we’ve covered whether Form NR73 is worth filing when you leave, and the two situations where it actually helps.

What counts as your departure date, and why does it matter?

The CRA generally treats it as the latest of three days: the day you leave, the day your spouse or dependants leave, and the day you become a resident of the country you’re settling in (CRA, leaving Canada). The deemed disposition happens on that day, your final return reports worldwide income only up to it, and the date itself goes on the return. All of that assumes you’ve actually become a non-resident, which turns on your residential ties first and, only if the US also claims you, the treaty tie-breaker: whether you’re still a Canadian tax resident.

Evidence that fixes the date.

• One-way tickets
• The closing statement, or the end of your lease
• The day your US status took effect

What goes on your final Canadian tax return?

Your worldwide income from January 1 up to the departure date, plus certain Canadian-source items for the rest of the year (s. 114). T1161 and T1243 attach when they apply; the forms and the math: T1161, T1243, T1244, and a worked example walks every line. The deadline doesn’t move: April 30 of the following year, or June 15 if you carried on a business.

What happens to your investments and your house when you leave?

The CRA deems you to have sold most property at fair market value on the day you leave, and your final return picks up the gain (s. 128.1(4)(b)). That’s the departure tax. Form T1161 becomes mandatory once your reportable property tops $25,000 in total fair market value (s. 128.1(9)). The house is the exception to the deemed sale, because Canadian real estate stays inside Canada’s tax net until a real sale happens (s. 128.1(4)(b)). It doesn’t escape the paperwork, though.

• A kept house is still reportable property, so it goes on the Form T1161 list and its value counts toward the $25,000 threshold (s. 128.1(10)).
• If the resulting bill is big, s. 220(4.5) lets you elect, by your balance-due day for the departure year, to pay when you actually sell instead.
• The concept and the planning moves before you leave: what the departure tax is. The mechanics: the forms and the math. A quick number from your own figures: our departure tax calculator.

Paying that bill doesn’t buy you a US cost base, which is the row most people miss on the American side. The treaty election that fixes it has to ride on one specific US return, and how the Article XIII(7) basis election works covers the deadline, the paperwork, and who it doesn’t work for.

Keeping the house as a rental changes the file. Rent paid to a non-resident carries 25% withholding on the gross amount (s. 212(1)(d)), and how the NR6, the withholding, and the section 216 return actually work runs the whole chain; the CRA wants the NR6 in before the first rent payment of the year.

What should you do with your RRSP, TFSA, CPP, and OAS?

Registered accounts skip the deemed sale. An RRSP, RRIF, or TFSA is each an “excluded right or interest” under s. 128.1(10), so the departure itself doesn’t deem them sold. The RRSP can stay in Canada, and the real question is lump sum or periodic RRSP withdrawals after the move. The TFSA needs a call before you board; whether the US treats it as a foreign trust and what that reporting costs are both their own guides. CPP and OAS aren’t accounts you manage, but their tax flips the day you land: how CPP and OAS are taxed in the US covers the withholding and the clawback.

• CPP is payable outside Canada (Service Canada).
• OAS can suspend after six months abroad unless you had at least 20 years of Canadian residence after turning 18 (Old Age Security Act, s. 9), and years under the US totalization agreement can help you reach the 20, so check your record first (while receiving OAS).
• On tax, once you’re a US resident, CPP and OAS become taxable only in the US, treated as though they were US Social Security benefits (Article XVIII(5) of the US-Canada treaty).

What do you need to clean up with the CRA and your bank before you go?

Tell them the date, then stop the money that assumes you still live in Canada. The GST/HST credit rides on a return filed as a Canadian resident (s. 122.5), and the Canada Child Benefit requires Canadian residence (s. 122.6), so both end when your residence does. The rest is dull work that stops benefits landing in a Canadian account months after you’ve gone.

• Update your CRA address and direct deposit while access is easy, and keep My Account alive for the final return.
• Tell your bank and brokerage you’ve become a non-resident.
• Moving with kids adds a second account to the call: what happens to an RESP and the CCB when you move covers why contributions have to stop and why the collapse decision can’t wait until you land.

What should I do next?

Put real dates on the ten rows above. If the file includes private-company shares, a rental you’re keeping, a business, or US visa timing questions, get the sequence checked before you book the flight.

If the US side of the move is an E-2 investor visa and a business purchase, the departure date interacts with the day count and with the corporation you leave behind: what an E-2 mover files in year one runs both sides in order.

This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.