Leaving Canada Permanently: What's the Tax Checklist?

Six jobs, in order: sever residential ties and document the date, inventory what you own, file Forms T1161 and T1243 with your final Canadian return, settle RRSP and TFSA questions, check CPP and OAS, and shut down CRA benefits that assume you still live there. The final return is due the following April 30 (June 15 if you carried on a business). Corridor-specific guides cover the treaty, pension, and registered-account details for Ontario to Florida, Australia, the UK, Portugal, Mexico, and Dubai. If T1135 years were missed, the late routes are in T1135 late filing and VDP.

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 sorts your ties into three groups, significant, secondary, and other (Folio S5-F1-C1). Significant means a dwelling that stays available to you, a spouse or partner, or dependants. The third group, a Canadian mailing address or a phone listing, is generally of limited importance unless it stacks up with the others.

Significant 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 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)). A kept house is still reportable property, though, so it goes on the 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.

• Once you’re a US person, every Canadian bank account, TFSA, and RRSP counts toward the FBAR threshold ($10,000 aggregate). If you kept accounts open and the FBARs are overdue, the fix is straightforward: filing late FBARs through FinCEN.
• CPP is paid to pensioners living outside Canada, and at a US address the payments are issued in US dollars (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 I clean up with CRA and banks before I 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. If money is still being paid to you from Canada, the CRA states this as a requirement, not a courtesy (CRA, leaving Canada).
• 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 is an E-2 visa and a business purchase, the departure date interacts with the day count and the corporation you leave behind: what an E-2 mover files in year one runs both sides in order.
• If you hold cryptocurrency, it isn’t on the excluded-property list with registered accounts: reporting crypto on both sides of the border covers the deemed disposition on departure and the FBAR/T1135 layer.
• If you’re still invoicing Canadian clients or running a business from the US side, GST/HST doesn’t close itself on the way out: whether to cancel, keep, or zero-rate your GST/HST registration is the loose end that list of ten rows doesn’t cover.
• If you hold a Canadian life insurance policy, the cross-border tax treatment changes when you become a US person, and the policy may lose its tax-advantaged status under IRC 7702.
• If you’re moving specifically to the US, the Canada-to-US tax checklist runs the full sequence: departure tax, RRSP/TFSA decisions, first US return structure, and the ongoing Canadian obligations that survive after you leave.
• For the residency side, how the CRA determines tax residency covers the residential ties test, including why keeping a vacant home or leaving a spouse behind keeps you resident even after you physically leave.
• Moving expenses deduction covers the Canadian deduction for relocation costs and the US suspension that applies at the other end.
• Estimated tax payments and instalments covers the quarterly obligations in both countries during and after the move year.
• Medical expenses deduction cross-border covers the coverage gap in the move year and how to claim on both returns.
• Severance pay cross-border covers the withholding and sourcing on a termination package received after the move.
• RPP/LIRA commuted value cross-border covers taking the commuted value of a Canadian employer pension when moving to the US.

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