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Canadian departure Tax

Departure tax

When you leave Canada, you are considered to have sold certain types of property (even if you have not sold them) at their fair market value (FMV) and to have immediately reacquired them for the same amount. This is called a deemed disposition and you may have to report a capital gain (also known as departure tax).

Your property could include the following:

  • shares/ jewelries/ paintings/ collections

Departure Tax does not apply to all assets. No departure tax is paid on

  • Real property located in Canada

  • The Canadian property of a business, including capital property and inventory, which has a permanent establishment in Canada

  • Excluded right or interest including Tax-Free Savings Accounts (TFSA) and Registered Retirement Savings Plans (RRSP)

  • Property a taxpayer owned either when the taxpayer last became a resident of Canada or inherited after the taxpayer last became a resident of Canada. This exception applies only where the taxpayer was a resident of Canada for no more than 60 months during the ten year period prior to the taxpayer’s emigration.

If the FMV of all reportable property owned when the taxpayer emigrated from Canada exceeds $25,000 CAD, the taxpayer will need to complete the T1161 List of Properties by an Emigrant of Canada form. Reportable property excludes the following:

  • Canadian currency

  • Personal-use property, such as clothing and cars, valued at less than $10,000 CAD.

  • Excluded right or interest, with some exceptions

  • Property a taxpayer owned either when the taxpayer last became a resident of Canada or inherited after the taxpayer last became a resident of Canada. This exception applies only where the taxpayer was a resident of Canada for no more than 60 months during the ten year period prior to the taxpayer’s emigration.

for more information go to official website

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