Emigrants -deemed disposition of property

Have you found a new opportunity outside of Canada? Will you be relocating soon?

Don’t let tax troubles follow you to your new land! Read further for information on how to emigrate from Canada effortlessly.

A Canadian resident who has left the country indefinitely to settle in another country, must declare worldwide income and pay taxes accordingly, before leaving.

Emigrant:

If you leave the country and sever your residential ties (i.e., if you sell your house and leave the country) you are considered an emigrant.

Final Taxes:

You must file taxes for the year in which you leave the country.

Deemed disposition:

If you own any properties in Canada (including shares, art work, jewelry etc.), you must disclose these properties immediately at their fair market value at the time of emigration even if they have not been sold. This is referred to as deemed disposition .

Form T1161 - List of Properties by an Emigrant of Canada

If the value of the property is more than $25,000 at the time you leave the country, you must complete the Form T1161, List of Properties by an Emigrant of Canada. In addition to Form T1161, a list of all of your properties inside and outside of Canada must be attached to your tax return.

Click to download Form T1161 from the CRA website.

Form T1243 - Deemed Disposition of Property by an Emigrant of Canada

Form T1243- Deemed Disposition of Property by an Emigrant of Canada- must be completed in order to report calculated capital gain and/or loss on Schedule 3 of the tax return. Fair market value of some of the properties may be difficult to estimate. Be sure to keep all supporting documents in the event that the Canada Revenue Agency requests to review the valuation.

Click to download Form T1243 from the CRA website.

As there is no actual sale happening, you can request the CRA to defer payment of tax until the property is finally disposed of. The CRA will require a satisfactory security deposit to allow this deferment.- Form T1244.

The following are excluded from being taxed:

Any personal-use property that has a value of less than $10,000; such as clothing, cars or household goods

Registered retirement savings plans, registered retirement income funds, pooled registered pension plans, registered retirement income funds, registered education savings plans, registered disability savings plans, and tax-free savings accounts. You are not allowed to contribute to these types of investments, once you leave

Real estate, when used exclusively as a principal residence, will not result in income-tax as it is tax-exempt

A permanently established business in Canada, business property, and any including inventory

HBP/LLP:

Repayable balance becomes part of the income or alternatively, repays the balance to your RRSP.

Settling your tax responsibilities will help you settle into your new country stress free!