Leaving Canada permanently triggers a departure tax that many emigrants don’t see coming. CRA treats you as having sold all your non-exempt investments at fair market value on the day you leave, which can generate a five- or six-figure capital gains bill. Your RRSP is exempt from deemed disposition but faces 25% withholding on future withdrawals (reduced by tax treaty), and your TFSA stays intact but you can’t make new contributions — and countries like the US will tax the growth. This checklist walks through every step, from severing residential ties to filing your final return.
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
If you’re moving to the US, withdraw your entire TFSA before departure — the US doesn’t recognize its tax-free status and will tax growth annually. For RRSP holders, the decision is more nuanced: the Canada-US tax treaty reduces withholding to 15% on periodic payments, which may be better or worse than collapsing the account while still a Canadian resident depending on your marginal rate. Consult a cross-border specialist before making irreversible decisions — the stakes on a $300,000+ portfolio are too high for guesswork.
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
The Bottom Line
Leaving Canada has real tax consequences that require months of planning, not days. File Form T1161 to list your property, calculate your deemed disposition gains, and consider posting security (Form T1244) to defer paying departure tax until you actually sell. Sever your residential ties cleanly — sell or rent your home at arm’s length, cancel provincial health insurance, and establish genuine residency abroad. File your final Canadian return by April 30, request a clearance certificate from CRA before distributing estate assets, and keep records for at least seven years. For complex situations, use CRA’s Form NR73 to get a formal residency determination.