Ceasing Canadian residency: the deemed disposition, departure tax and how to defer it, Form NR73, Part XIII withholding after you leave, and what to do with a Canadian corporation or home.
24 guides, each written by a CPA licensed in the US and Canada.
Yes. Form T1244 elects under ITA 220(4.5) to defer the tax on your deemed disposition, and the statute deems security accepted up to a floor amount.
Cross-BorderCanada's departure tax is income tax on a deemed sale of your property at fair market value the day you stop being resident. Half the gain is taxed at your own rates.
Cross-BorderNot automatically. You need the Article XIII(7) treaty election on your first US return after the move, or both countries tax the same gain twice.
Cross-BorderWhen a Canadian resident emigrates, Canada treats them as having sold most of their property at fair market value on the date of departure.
Canadian TaxMany non-residents of Canada file no return once Part XIII withholding settles their income. You file for the year you leave, Canadian work, property sales, rent or pensions.
Canadian TaxA deemed disposition is a fiction in the Income Tax Act that treats you as having sold property at fair market value (FMV).
Cross-BorderWhen a Canadian resident dies, Canada taxes every dollar of unrealized capital gain as if the person sold everything the day before death.
Canadian TaxYou're a deemed non-resident of Canada when Canadian rules keep you resident but a tax treaty makes you resident elsewhere. Non-resident rules and departure tax then apply.
Cross-BorderLeaving Canada doesn't cancel the principal residence exemption, and the departure rules don't trigger it either. Covers key rules, filing requirements,.
Cross-BorderUsually not. Form NR73 is optional and gets you a CRA opinion that doesn't bind the CRA. It helps when your ties point both ways; a clean break just needs the departure return.
Canadian TaxYou don't apply to become a non-resident of Canada. You cut your significant ties, settle abroad, and declare it on your departure-year return. NR73 is optional.
Cross-BorderCanada gives an individual 10 calendar years from that year's end under ITA 152(4.2), and the Minister may. Usually yes.
Cross-BorderLeaving Canada for Australia triggers departure tax on unrealized gains. Australia has no arrival tax, and a cost-base step-up stops double tax on the gain.
Cross-BorderTax checklist for Canadians moving to Dubai or the UAE. Departure tax, RRSP, TFSA, pensions, Part XIII withholding without a treaty cap, and Section 217.
Cross-BorderTax checklist for Canadians moving to Mexico. Departure tax, RRSP, TFSA, pensions, the Canada-Mexico treaty step-up election, and SAT registration.
Cross-BorderThe tax checklist for Canadians moving to Portugal. Departure tax, RRSP, TFSA, pensions, the Canada-Portugal treaty, and what replaced the NHR regime.
Cross-BorderThe tax checklist for Canadians moving to the UK. Departure tax, RRSP, TFSA, pensions, the Canada-UK treaty, and the Statutory Residence Test.
Cross-BorderSix steps: sever ties, inventory assets, file T1161 and T1243, settle RRSP and TFSA, check CPP/OAS, and shut down CRA benefits.
Cross-BorderCanada's non-resident withholding tax is 25% of the gross payment under Part XIII. For US residents the treaty cuts dividends and periodic pensions to 15%, and CPP and OAS to zero.
Cross-BorderMoving from Ontario to BC or Alberta? OHIP covers you to the end of the second full month after you leave. BC and Alberta wait periods, absence limits and leaving Canada.
Cross-BorderA non-resident can keep an RRSP and contribute only from unused room. Withdrawals face 25% Canadian tax; periodic RRIF payments to a US resident are capped at 15%.
Cross-BorderA section 217 election trades the flat 25% withholding on non-resident RRSP income for graduated Canadian rates. Who wins, the June 30 wall, and the math.
Cross-BorderIt stays Canadian but loses CCPC status the day you leave. What changes is status, on two dates rather than one. Covers treaty provisions, foreign tax.
Cross-BorderITA 128.1(8) lets you elect to reduce the gain Canada taxed at departure, but only when you later sell the property at a loss and the property.