The short answer: Start by deciding whether and when each adult becomes a Canadian non-resident for tax purposes. Then list every asset and Canadian income source, identify any deemed disposition, and coordinate the Canadian return with the destination's first tax year. Do this before selling investments or assuming that a retained home has no effect.
Work out residency from the life you are actually leaving and building
The CRA gives greatest weight to significant residential ties: a dwelling place in Canada, a spouse or common-law partner, and dependants. Secondary ties such as personal property, provincial health coverage, a driver's licence, accounts and memberships can matter when considered together. Keeping Canadian citizenship or a passport does not by itself make someone tax resident.
A family that keeps a Canadian home available and leaves close family behind may remain a factual resident. A family that establishes a settled home abroad and severs its main Canadian ties may become an emigrant. If both countries treat an adult as resident, the relevant tax treaty may use tie-breaker rules and can make that person a deemed non-resident of Canada.
- Record when each adult leaves, when dependants leave and when the destination home becomes available.
- Save leases, visas, school enrolment, work arrangements and travel records that describe ordinary life abroad.
- Document whether the Canadian home is sold, rented to an arm's-length tenant or kept available.
- Use Form NR73 only when seeking the CRA's opinion is appropriate; it is not a compulsory departure form for every emigrant.
Prepare the departure-year return carefully
For the year of departure, an emigrant normally reports worldwide income for the resident part of the year and enters the departure date on the return. The provincial or territorial package is generally based on where the person lived on the date they left Canada. Quebec residents may also have a Revenu Quebec return and separate provincial considerations.
Tell the CRA the new address and departure date, and tell Canadian financial institutions and other payers when non-resident status begins. Benefits and credits such as the Canada child benefit and GST/HST credit can change, so report the move promptly rather than allowing an overpayment to build.
Check whether departure tax applies to your assets
When someone ceases Canadian residence, Canada can treat certain property as sold and immediately reacquired at fair market value. This deemed disposition can create capital gains even though no cash sale happened. Shares, non-registered investments, some business interests and valuable personal property deserve an asset-by-asset review.
Form T1243 calculates deemed gains and losses. If the total fair market value of reportable property exceeds C$25,000, Form T1161 may also be required; the form has specific exclusions, including cash and many registered plans. An election on Form T1244 can defer payment of departure tax, although security may be required above the CRA threshold.
Worth knowing: The C$25,000 T1161 threshold is a reporting threshold, not a blanket exemption from departure tax. The list of excluded property and the deemed-disposition rules are not identical.
Plan for Canadian income after the move
A non-resident can still owe Canadian tax on Canadian-source income. Rent, employment or business income earned in Canada, pensions, dividends and withdrawals from registered plans follow different Part I or Part XIII routes. Canadian payers commonly withhold non-resident tax, and a treaty may reduce the rate for a particular income type.
Give payers accurate residence and address information and keep NR4 slips. A section 216 return can be useful or required in the rental-income process, while a section 217 election may reduce Canadian tax on some pension and similar income. These elections need individual calculations rather than a general assumption that withholding is final.
Match Canada with the destination's first tax year
Thailand, Malaysia, Vietnam, Indonesia and the Philippines use their own residence tests, tax years and rules for foreign income. The destination may not give the same tax-free treatment to a TFSA, may use a different cost basis for investments and may tax a gain or pension at a different time.
Create one schedule showing residence dates, work location, pay, investment income, gains, property income and tax withheld in both countries. Ask a cross-border adviser how the treaty and foreign tax credit rules apply before making a large withdrawal or disposal.
What to settle before filing the Canadian departure return
Use this as a briefing list for a cross-border accountant. Ownership, dates and destination rules can change the answer.
| Question | Why it matters | Evidence to keep |
|---|---|---|
| When did each adult cease residence? | It separates resident and non-resident treatment | Travel, homes, family, visas and work records |
| Which property is deemed disposed of? | Unrealised gains may be taxable on departure | Cost base, ownership and fair-market-value evidence |
| Is T1161 required? | Late filing can carry a daily penalty | The full property list and exclusions used |
| Will any Canadian income continue? | Withholding, NR4 slips and returns differ by income | Payer notices, statements and tax slips |
| Are credits or benefits still being paid? | Ineligible payments may need to be repaid | CRA notice, departure date and benefit correspondence |
| Can both countries tax the same amount? | A treaty or foreign tax credit may provide relief | Both returns, assessments and proof of tax paid |
Put the work in a sensible order
Before choosing the final date
Map residential ties, destination residence, assets, family timing and continuing income.
Before selling or transferring assets
Model departure tax, destination tax, exchange rates and available elections.
When non-residence begins
Update the CRA, payers and financial institutions with accurate dates and address details.
At the first filing cycle
Complete the departure return and reconcile Canadian withholding with destination reporting.