Leaving Canada permanently triggers a departure tax that many emigrants don’t see coming. CRA treats you as having sold all your non-exempt investments at fair market value on the day you leave, which can generate a five- or six-figure capital gains bill. Your RRSP is exempt from deemed disposition but faces withholding on future withdrawals, and your TFSA stays intact but you can’t make new contributions. This checklist walks through every step, from cutting residential ties to filing your final return; it is one of the international and cross-border tax guides on this site.
Before You Leave
Departure Checklist
Action
Priority
Determine residency status
High
Calculate departure tax
High
Decide on property
Medium
Update accounts
Medium
File final tax return
Required
Notify government
Required
Determining Departure Date
Factors
Your intent
Leaving permanently
Ties severed
Home, spouse, dependents
Usually
Date you leave
CRA may review
Actual vs. claimed
Whether you have actually become a non-resident turns on the residential ties test, explained in full in am I a Canadian tax resident.
Deemed Disposition
What It Means
Rule
You’re treated as if
You sold all assets
At
Fair market value
On
Date of departure
Tax on
Capital gains triggered
Assets Subject to Deemed Disposition
Included
Not Included
Stocks, investments
Canadian real property
Foreign property
Pensions (RRSP, RPP)
Partnership interests
Some eligible capital property
Personal property over $10K
Canadian Real Property
Canadian real estate is not deemed sold when you leave; it is taxed when you actually sell it, with buyer withholding unless you obtain a clearance certificate. Renting it out or selling it as a non-resident (section 216 and section 116) is covered in the non-resident property tax guide.
Example: Deemed Disposition Tax
Assets
FMV at Departure
ACB
Gain
Stocks
$200,000
$100,000
$100,000
Foreign property
$150,000
$100,000
$50,000
Total gain
$150,000
Tax Calculation
Inclusion rate
50% (flat, no threshold)
Taxable amount
$75,000
Tax (estimated 30%)
~$22,500
Deferring Departure Tax
Security for Departure Tax
Option
Post security
With CRA
Defer payment
Until assets actually sold
Interest
May accumulate
Form
T1244
Excluded Property Election
Form T1243
Some property
Can be excluded
Tax deferred
Until sold
Must report
Future disposition
RRSP and RRIF
RRSP Treatment
On Departure
No deemed disposition
Stays in Canada
Can keep it
Future withdrawals
Withholding tax
Non-resident rate
25% (or treaty rate)
Withdrawals after you leave fall under Part XIII non-resident withholding, and the rates by income type and treaty are set out in the non-resident tax guide.
RRIF at Age 71
Rule
Must convert
RRSP to RRIF by Dec 31 of year you turn 71
Minimum withdrawals
Required
Withholding
25% on each payment
RRSP Timing Before Leaving
Option
Consideration
Collapse RRSP first
If moving to low/no tax country
Keep RRSP
If treaty reduces withholding
Timing
Based on destination tax rules
TFSA
You can keep an existing TFSA after you leave, but contributions made while non-resident are penalized and no new room builds up, and some countries (the US among them) tax the account’s growth. The rules for a TFSA as a non-resident, including how room is counted in the year you leave, are covered in the TFSA contribution room guide.
CPP and OAS
CPP is payable abroad, with non-resident withholding that a treaty can reduce. Whether OAS continues outside Canada depends on how many years you lived here after 18; the rules for OAS abroad are on the OAS eligibility page.
Steps to Become Non-Resident
The practical steps are to cut the ties CRA weighs most (a home available to you, a spouse or dependants in Canada) and then the secondary ones such as provincial health coverage, a driver’s licence and bank accounts. The full list of ties, and how CRA weighs them, is on the residency test page.
Establish New Residence
In New Country
Home
Secure housing
Employment
If applicable
Bank accounts
Open
Tax registration
If required
Forms to File
Departure Forms
Form
Purpose
T1 Final Return
Report income to departure date
T1161
List of property on departure
T1243
Deemed disposition election
T1244
Security for departure tax
Final Canadian Tax Return
Report
Period
Worldwide income
January 1 to departure date
Departure tax
Deemed dispositions
Due date
April 30 following year
How income from abroad is reported for the resident part of that year is covered in foreign income tax in Canada.
Provincial Health Insurance
Cancel Coverage
Province
When Coverage Ends
Ontario
Departure date
BC
After 2 months
Alberta
End of 2nd month
Others
Check provincial rules
Travel Insurance
Need
Before departure
Covered
After cancel
Get private coverage
While travelling
Before establishing elsewhere
The Bottom Line
Leaving Canada has real tax consequences that take months of planning, not days. Form T1161 lists your property, Form T1243 covers the deemed disposition, and posting security (Form T1244) can defer departure tax until you actually sell. CRA looks for ties that are actually cut: a home sold or rented at arm’s length, provincial health insurance cancelled, and a genuine residence abroad. The final Canadian return is due by April 30, records are kept for at least six years, and CRA’s Form NR73 is available for a formal residency determination.
Bank Accounts and Investments
Bank Accounts
Action
Keep one
May be useful
Large accounts
May trigger questions
Notify bank
Change to non-resident status
Investment Accounts
Type
Treatment
Non-registered
Deemed sold
RRSP/TFSA
Can keep
RESP
Can keep, limits on contributions
Brokerage Accounts
Issue
Many brokerages
Don’t serve non-residents
May need to
Transfer or close
Research
Before departure
Tax Treaties
Treaties reduce withholding on pensions and investment income, settle dual-residency cases with tie-breaker rules, and prevent double tax through credits. The treaty rates on RRSP, pension and investment payments to non-residents are listed in the non-resident tax guide.
After Departure
Ongoing Obligations
If You Have
Requirement
Canadian rental property
File Section 216 return
Canadian business
File returns
Canadian employment
Withholding applies
Rental withholding, the NR6 undertaking and the section 216 return are explained in the non-resident property guide.
Common Mistakes
Mistake
Consequence
Not filing departure return
Penalties, interest
Ignoring deemed disposition
Tax surprise later
Contributing to TFSA
Penalty tax on contributions
Keeping too many ties
Still considered resident
Not planning RRSP
Higher withholding
Timeline
When
Action
6-12 months before
Plan, consult professionals
3-6 months before
Start severing ties
1-3 months before
Final arrangements
Departure
Last day in Canada as resident
By April 30 after
File final return
Remote workers who travel without settling anywhere face a different question, whether they have left at all; the digital nomad tax guide covers that case.