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International Tax, Cross-Border and Expatriate Tax Expert
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How does Canadian Departure Tax Work?

I’m trying to figure out how my Canadian Departure Tax will work. I have some assets that might qualify for exceptions, but don’t know what ones I should typicall pay on. Thanks!

The first step in figuring out how Canadian Departure Tax will work in your case, is to understand your residency determination and how that will impact your taxes. You can find some guidance on that here: Understanding Canada Departure and Residency Determination

There are some Canadian Departure Tax Exemptions, for example…

  • If your Canadian real property was a principal residence (unless you plan to rent it out)
  • Your Canadian business property operates as a permanent establishment
  • You are a short term resident (60 months or less)

Departure Tax is typically paid on these assets:

  • Personal use and listed personal property (art, stamps, jewelry, coin stamps, rare manuscripts)
  • Property owned outside of Canada
  • Unincorporated businesses located outside of Canada
  • Portfolio investments (mutual funds, company shares, interests in partnerships, non-resident inter-vivo trusts, etc.)

Filing forms include two special schedules: T1161 and T1243. You can also defer departure tax payment until you dispose of property, with no interest, which requires a form T1244 with your final tax return. 

If you’re moving to the US, there are special considerations to avoid double taxation. For this, I recommend reading in more detail: 7 Things You Need to Know About Tax Relief for Canadians Living in the US.

This is another one where each person’s circumstances, potential tax burden, and options will be different. I can’t stress enough how important it is to speak with a tax advisor as soon as you know you will be emigrating!



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