Canadian departure tax: assets, records and forms

What departure tax means

On ceasing Canadian tax residence, certain property is treated as sold and immediately reacquired at fair market value. This deemed disposition can create a capital gain without an actual sale. Exceptions include Canadian real estate and registered plans; an exception here does not make future income or disposals tax-free.

Official reference: CRA: dispositions of property for emigrants

The preparation problem is practical: you may need a defensible value and historical cost records even though no broker issued a sale confirmation. Identify privately held shares, unusual investments and incomplete records early.

Build an asset inventory before calculating

Give jointly owned property its own line and identify each owner. Do not assume a recent account balance supplies the adjusted cost base. For business shares, ask who will prepare the valuation, what records they need and how long the work will take.

A gain is not the tax bill

The amount payable needs a separate calculation using the rules for the relevant year and your circumstances. Ask the adviser to show the assumptions, applicable treatment and effect of available losses. Avoid relying on an online estimate that does not identify its tax year.

Use two budget lines: cash available for the move and cash reserved for possible tax. A valuable asset you intend to retain is not necessarily available cash for either purpose.

Keep the three form questions separate

T1243 reports the deemed-disposition calculation. T1161 lists reportable property when the applicable total fair market value exceeds C$25,000, subject to exclusions. That reporting threshold is not a tax-free allowance. T1244 concerns an election to defer payment of qualifying departure tax.

Official reference: CRA: Form T1243 · CRA: Form T1161 · CRA: Form T1244

The CRA lists exclusions from the T1161 calculation, including cash and registered plans. The lists for reporting and deemed disposition are not identical. A T1161 obligation can exist even without a return-filing obligation. A deferral election has its own deadline and can require security; it does not cancel the liability.

Official reference: CRA: dispositions of property for emigrants

Ask for a written filing list with the current form version, responsible person, supporting records and deadline. Include provincial obligations where relevant, particularly if departing Quebec.

Questions worth resolving before departure

• Which assets are included, excluded or subject to a special rule?
• Do prior immigration dates or inherited assets change the analysis?
• Are valuations needed before the proposed move date?
• Does selling before departure produce a different result from holding the asset?
• Could both countries tax a later sale, and how would relief work?
• If payment is deferred, what security and later reporting will be required?

Keep the asset inventory and final calculations after filing. They can matter when you sell an asset abroad or return to Canada. Add the adviser’s answer beside each open question so the file records a decision, not just a collection of statements.

Worked numbers: value is not the tax bill

The holding can create a tax calculation without creating cash. Keep a separate cash-flow line for the eventual payment or a properly arranged deferral. Do not sell solely because this example contains a gain; compare the consequences of holding and selling in both countries.

Official reference: CRA deemed dispositions and deferral.

Classify an asset twice

First ask whether departure creates a deemed disposition. Then separately ask whether the asset counts for T1161. These are different tests. The following is a starting point for ordinary holdings; elections, trusts, business facts and prior immigration history can change the answer.

Official reference: CRA property-list exclusions.

Put the election on its own calendar line

CRA currently requires a T1244 deferral election by 30 April of the year after emigration. For a 2026 departure, that points to 30 April 2027 under the current rule. Do not assume a later personal return deadline also extends the election deadline. Security may be required; start that discussion well before the deadline.

Official reference: CRA deferral timing and security requirements.

For each asset, save the owner and ownership share, acquisition history, adjusted cost calculation, departure-date valuation, currency conversion method, proposed treatment and missing evidence. Private-company shares deserve early attention because a current bank balance does not establish the value of the company.

Ask the destination adviser which cost basis will apply to a later sale and what relief, if any, addresses overlapping taxation. Retain both the Canadian departure calculation and the original acquisition records.