Do I have to pay tax when leaving Canada?

Potentially yes. On departure, you're deemed to have sold most assets at fair market value, triggering capital gains tax. RRSPs are not deemed disposed but face withholding on future withdrawals. Some assets can be exempted by filing the right forms.

What happens to my RRSP if I leave Canada?

Your RRSP stays intact, but when you withdraw as a non-resident, there's 25% withholding tax (may be reduced by tax treaty). You can leave the RRSP to grow or collapse it over time. Converting to RRIF at 71 still applies.

Can I keep my TFSA if I leave Canada?

You can keep funds in your TFSA, and they continue to grow tax-free in Canada. However, you cannot contribute as a non-resident (1% monthly penalty). Some countries may tax your TFSA gains.

Leaving Canada Tax Checklist | Emigration Guide

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

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

Exemption
Not deemed sold	At departure
Taxed when	Actually sold
Non-resident	25% withholding applies
Certificate	T2062 for clearance

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 (2024+)
First $250K gain	50% inclusion
Above $250K	66.67% inclusion
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)

Withholding on RRSP Withdrawal

Amount	Withholding Rate
Any amount	25% (non-resident)
Treaty reduction	May apply
US residents	15% under treaty (periodic)

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 Strategy 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

TFSA as Non-Resident

Rule
Keep existing TFSA	Yes
Contribute	No (1% monthly penalty)
Growth	Tax-free in Canada
Foreign tax	May apply in new country

TFSA Issues

Country	Treatment of TFSA
USA	Taxable (no treaty exemption)
UK	Taxable
Others	Varies—research

Strategy

If Moving to US	Consider withdrawing
Why	US taxes TFSA growth
When	Before departure
Room	Gone as non-resident

CPP and OAS

CPP Benefits Abroad

Qualification
Earned in Canada	Based on contributions
Receive abroad	Yes
Withholding	25% (or treaty rate)
US treaty	No withholding

OAS Benefits Abroad

Rule
Lived in Canada 20+ years	Full portability
Less than 20 years	Stops after 6 months abroad
Recovery tax	May still apply if high income

Non-Resident Withholding

Benefit	Non-Resident Rate
CPP	25% (treaty may reduce)
OAS	25% (treaty may reduce)
US residents	0% under treaty

Steps to Become Non-Resident

Sever Residential Ties

Primary Ties	Action
Home	Sell or rent (arm’s length)
Spouse/common-law	Leave with you
Dependents	Leave with you

Secondary Ties

Tie	Action
Personal property	Move or sell
Bank accounts	Close or minimize
Credit cards	Can keep (minor tie)
Driver’s license	Surrender
Health insurance	Cancel provincial
Club memberships	Cancel

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

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

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

Why They Matter

Benefit
Reduced withholding	On pensions, investments
Tie-breaker rules	Residency determination
Avoid double tax	Credit mechanisms

Key Treaty Countries

Country	RRSP Withholding	CPP/OAS
USA	15% (periodic)	0%
UK	15%	15%
Australia	15%	15%
Germany	15%	15%

After Departure

Ongoing Obligations

If You Have	Requirement
Canadian rental property	File Section 216 return
Canadian business	File returns
Canadian employment	Withholding applies

Rental Property

As Non-Resident
Withholding	25% of gross rent
OR file NR6	Withhold on net
Annual return	Section 216

Common Mistakes

What to Avoid

Mistake	Consequence
Not filing departure return	Penalties, interest
Ignoring deemed disposition	Tax surprise later
Contributing to TFSA	1% monthly penalty
Keeping too many ties	Still considered resident
Not planning RRSP	Higher withholding

Professional Help

When to Get Advice

Situation	Recommendation
Significant assets	Tax accountant
Business interests	Tax lawyer
Complex situation	Cross-border specialist
US departure	US/Canada tax specialist

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