Why can departure tax apply when I leave Canada without selling investments?

Arsen Accounting Services · Question 172 · Sources checked October 29, 2026

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Leaving Canadian tax residency can trigger a deemed disposition of certain property at fair market value. The tax system treats the relevant property as sold for this purpose even though you still own it. This can create a tax bill without sale proceeds.

Identify the property covered and excluded

CRA's emigrant guidance includes exceptions for particular property and circumstances. Do not assume every asset is subject to departure tax or that every reporting form covers the same property. Form T1243 calculates relevant deemed gains and losses, while Form T1161 has a separate property-reporting purpose and threshold.

A deferral election may be available under specified conditions. Its deadline and possible security requirements need to be reviewed before the relevant filing date.

Official guidance: [1], [2].

Value assets at the right date

For example, a long-held non-registered investment may have a substantial unrealized gain when residency ends. Keep the market value and adjusted cost base at that date rather than using the eventual sale price as a substitute.

Prepare a departure inventory

• All investment, business, and other property holdings.
• Tax costs and fair market values at departure.
• Acquisition history and previous residency periods.
• Proposed sales, transfers, and available cash for tax.

Ask your preparer to identify the tax calculation, information returns, and elections separately. Keep the resulting cost records for future Canadian and foreign reporting. Do not transfer assets simply to avoid a presumed rule before the consequences are understood; the transfer itself may create additional tax events or reporting requirements.