Personal & Corporate Tax

Taxes on Out of Country Moves

Moving out of Canada comes with some significant tax implications for many individuals. When a Canadian ceases to be a resident, there is generally a deemed disposition of assets owned by that person at their fair market value (this is known as “departure tax”). Any deemed gains must be reported on the person’s final tax return as a resident of Canada.

Certain types of property are not subject to the departure tax rules, including:

  • Interests in Canadian real estate
  • RRSPs, RRIFs and TFSAs
  • Entitlements under pension and stock option plans
  • Beneficial interests in most personal trusts resident in Canada

It is also possible to elect to defer the payment of tax resulting from the departure tax until the property is actually disposed of. It is therefore very important to obtain proper tax advice when considering becoming a non-resident of Canada.