Leaving Canada to Resettle Abroad: Departure Tax, Non-Resident Status and Filing Taxes

Who administers this

Moving from Canada to live long term in another country changes your income tax status. This area is administered by the Canada Revenue Agency (CRA). Once your status changes, the income you report, the withholding rules that apply, and the benefits you can receive all change with it.

Who counts as an emigrant

According to the CRA, you are generally an emigrant for income tax purposes if you meet all of the following conditions:

You leave Canada to live in another country
You sever your residential ties with Canada

Severing residential ties means you do not keep your main ties with Canada. The CRA gives these examples: you dispose of or give up your home in Canada and establish a permanent home in another country; your spouse or common-law partner or dependants leave Canada; you dispose of personal property and break social ties in Canada and acquire or establish them in another country.

If you leave Canada but keep residential ties there, you are usually considered a factual resident, not an emigrant. However, if you are also considered a resident of another country with which Canada has a tax treaty, you may be considered a deemed non-resident. The CRA states that deemed non-residents are subject to the same rules as emigrants.

When you become a non-resident

When you leave Canada to settle in another country, you usually become a non-resident for income tax purposes on the latest of:

the date you leave Canada
the date your spouse or common-law partner and dependants leave Canada
the date you become a resident of the country you settle in

If you lived in another country before living in Canada and you leave Canada to resettle in that country, you usually become a non-resident on the date you leave Canada. The CRA states this applies even if your spouse or common-law partner temporarily stays in Canada to dispose of your home.

Departure tax

When you leave Canada, the CRA considers you to have sold certain types of property at their fair market value (FMV), even if you have not sold them, 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. The CRA lists property such as shares, jewellery, paintings, and collections.

The CRA states that if the total FMV of all the property you owned when you left Canada was more than $25,000, you must complete Form T1161, List of Properties by an Emigrant of Canada.

Filing in the year you leave

Which income tax package you use depends on the province or territory where you resided on the date you left Canada.

On the return, the CRA lists the following:

Enter your date of departure from Canada on page 1 in the "Residence Information" area
Enter your spouse's or common-law partner's net world income for 2025 on page 1 under that heading; net world income is the total of net income from all sources both inside and outside Canada for the period you were a resident of Canada. If applicable, also enter the universal child care benefit (UCCB) lump-sum payment on line 11700 and the UCCB repayment on line 21300

Income is reported in two parts:

For the part of the year you were a resident of Canada, you report your world income, meaning income from all sources inside and outside Canada, in Canadian dollars
After you leave Canada, as a non-resident you pay Canadian income tax only on your Canadian source income. Only certain types of Canadian source income are reported on your return; others are subject to non-resident withholding tax

Deductions and credits

The CRA states that you can claim most deductions that apply to you. Moving expenses generally cannot be deducted for a move out of Canada, but you may be able to deduct them if you meet both of the following conditions: you left Canada to take courses at the post-secondary level as a full-time student at an educational institution in another country, and you received a taxable Canadian scholarship, bursary, fellowship or research grant to attend that institution.

Federal non-refundable tax credits you can claim are limited to the total of the credits that apply to the part of the year you were a resident of Canada plus the credits that apply to the part of the year you were not. Certain provincial or territorial non-refundable tax credits (Form 428) may also be limited.

For overpayment of Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) contributions, the CRA points to line 44800 if you were not living in Quebec before you left, and to Form RC381 if you were.

For provincial or territorial tax credits (Form 479), the CRA states that you are generally not entitled to these credits unless you were a resident of Canada on December 31.

After you leave Canada

Electing under section 217: When you receive certain types of income from Canada after you leave, the Canadian payer must withhold non-resident tax and send it to the CRA. The tax withheld is usually your final tax obligation to Canada on that income. The CRA states you could benefit from choosing to elect under section 217 to include this income on your return.

Tax-Free Savings Account (TFSA): If you hold a TFSA when you leave Canada, you can keep it and continue to benefit from the exemption from Canadian tax on investment income and withdrawals. However, the CRA states you cannot contribute to your TFSA while you are a non-resident, and your contribution room will not increase.

Home Buyers' Plan (HBP) and Lifelong Learning Plan (LLP): If you participate in either plan and leave Canada, special rules apply.

Benefits and credits: The CRA states you must tell the CRA the date you leave Canada. Generally, as a non-resident you are not eligible to receive the Canada Groceries and Essentials Benefit or the Canada child benefit (CCB), including payments from certain related provincial or territorial programs. If you receive such credits or payments after you leave Canada, the CRA asks you to contact it immediately.

Tax obligations as a non-resident

A non-resident pays tax on income received from sources in Canada. The type of tax and whether a return is required depend on the type of income.

Part XIII tax is deducted from the types of income listed below. The CRA states that to make sure the correct amount is deducted, it is important to tell Canadian payers that you are a non-resident and your country of residence. The most common types include: dividends; rental and royalty payments; pension payments; old age security pension; Canada Pension Plan and Quebec Pension Plan benefits; retiring allowances; registered retirement savings plan payments; registered retirement income fund payments; annuity payments; management fees.

The CRA states the usual Part XIII tax rate is 25% unless a tax treaty between Canada and your home country reduces it, and that Part XIII tax is not refundable by filing a Canadian tax return. Do not file a return to report this income unless you are electing to file for Canadian rental income from real or immovable properties or timber royalties (Guide T4144, section 216) or certain Canadian pension income (section 217).

Part I tax is usually deducted by the payer from certain types of income. If you carry on a business in Canada, or sell or transfer taxable Canadian property, you may have to pay an amount on account of tax.

Filing due dates

The CRA states your return has to be filed on or before:

April 30 of the year after the tax year
June 15 of the year after the tax year, if you or your spouse or common-law partner carried on a business in Canada (other than a business whose expenditures are mainly in connection with a tax shelter)

A balance of tax owing must be paid on or before April 30 of the year after the tax year, regardless of the due date of the return.