Departure tax in Canada applies the moment you cease to be a Canadian tax resident, whether or not you have physically left the country yet. Tohme Accounting helps Ottawa and Toronto clients understand what’s owed, which assets are affected, and what filings the CRA requires.
Departure tax applies once you cease to be a Canadian tax resident, which the CRA determines based on your residential ties, not simply the date you physically leave the country behind. On that date, most of your capital property is treated as sold at fair market value, even though no actual sale takes place. Samer Tohme, CPA, reviews your specific residency facts to confirm whether this deemed disposition applies to your situation before you finalize any moving plans.
Deemed disposition Canada rules treat your capital property as sold at fair market value on your departure date, even though nothing was actually sold that day. Any resulting capital gain is included in income at the applicable inclusion rate for that tax year, on top of any other income you earned before leaving. Tohme Accounting works through which specific assets are affected and calculates the resulting tax exposure before you leave, so there are no surprises once the departure year return is filed.
Not all property is subject to departure tax when you leave Canada. Registered accounts such as RRSPs and TFSAs, along with directly held Canadian real estate, are generally excluded from deemed disposition, though they may still carry other tax consequences after you leave the country. Tohme Accounting reviews your full asset list to confirm what’s exempt and what isn’t before your departure date, so the resulting tax picture is clear ahead of time rather than after the fact.
Your departure year tax return must report worldwide income earned up to your departure date, the deemed disposition of applicable property, and a disclosure of the property you held when you left Canada, regardless of its value. These requirements apply even if you don’t end up owing departure tax once exemptions are applied to your situation and asset mix. Tohme Accounting prepares this return alongside your standard filing obligations for that year.
If departure tax applies to your situation, the CRA generally allows you to elect to defer payment until the property is actually disposed of, rather than paying the full amount when you leave Canada. This election does not eliminate the tax; it simply postpones when it becomes due and payable. Depending on the amount involved, security may need to be provided to the CRA to support that election. Samer Tohme, CPA, reviews whether this election makes sense given your specific assets and timeline.
If you become a Canadian resident again while still holding property that was subject to deemed disposition Canada rules, an election may let you treat the original disposition as if it had never occurred, which can recover departure tax already paid on that property. This applies whether the return to Canada happens quickly or after several years abroad. Tohme Accounting reviews whether this applies if your move to or from Canada may be temporary.
Tohme Accounting works with Ottawa and Toronto clients through the entire departure tax process, from confirming residency status to preparing the departure year return and any related elections that may apply to your specific situation. Samer Tohme, CPA, reviews your specific assets and timeline before any filing decisions are made, so nothing is assumed or overlooked along the way. If you’re planning a move out of Canada, a free consultation will clarify exactly what applies.
Departure tax is the tax consequence of ceasing to be a Canadian tax resident, determined by your residential ties rather than simply the date you physically leave the country behind. On your departure date, most of your capital property is treated as sold at fair market value, which can trigger a capital gain even though no sale actually happened. It applies alongside your regular departure-year tax return, not as a separate filing.
Deemed disposition means the CRA treats certain property as though it were sold at fair market value on a specific date, such as the date you cease Canadian residency, even though you haven’t actually sold anything at all. Any resulting gain is calculated and taxed as if the sale had genuinely occurred on that date. It’s a mechanism for taxing unrealized gains when your residency status actually changes, not before.
There’s no fixed departure tax amount that applies to everyone leaving Canada. It depends on which assets you hold, their fair market value on your departure date relative to what you originally paid for them, and which assets qualify for an entirely exempt deemed disposition. Tohme Accounting reviews your specific asset list to estimate what applies before you finalize your move, rather than leaving it to guesswork.
Registered accounts such as RRSPs, RRIFs, and TFSAs are generally excluded from deemed disposition Canada rules, as is directly held Canadian real estate, though both may carry other tax consequences down the line. Personal property under a set value threshold is also excluded from the calculation entirely. Other capital property, including investments and business assets, is typically subject to departure tax unless a specific exemption applies to your particular situation.
Yes. Your departure year tax return must report worldwide income earned up to your departure date and disclose the property you held at that time, along with any deemed disposition that applies to your specific asset mix. This holds true whether or not departure tax is ultimately owed once exemptions and available elections are applied to your situation. Tohme Accounting prepares this return alongside your other filing obligations for that year.
