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Leaving Canada: Departure Tax, Final Tax Return and What to Tell the CRA

4 min read

In this guide
  1. Quick answer
  2. When do you become a non-resident?
  3. How do you file the return for the year you leave?
  4. What is the departure tax?
  5. What happens to credits, accounts and benefits?
  6. Common mistakes
  7. FAQ
    1. How do I ask the CRA about my residency?
    2. Do I still pay tax on Canadian income?
    3. Can I come back later?
  8. Key takeaways
  9. Related guides
  10. Sources

What tax steps do you need to take when you leave Canada? According to the Canada Revenue Agency (CRA), you are an emigrant if you leave Canada to live elsewhere and sever your residential ties. You generally become a non-resident on the latest of your departure date, the date your spouse or dependants leave, or the date you become a resident of your new country. You then file a return for the year you leave and may face a departure tax on certain property.

Quick answer

  • If you owe tax or are due a refund, file a Canadian return. If you do not need to file, tell the CRA your departure date.
  • Certain property is treated as sold at fair market value when you leave, which may create a capital gain (the departure tax).
  • If the total fair market value of your property exceeds $25,000, complete Form T1161.
  • Your TFSA can stay open, but you cannot contribute to it and your contribution room will not increase.
  • You generally cannot receive the Canada Child Benefit as a non-resident.

When do you become a non-resident?

The CRA says you generally become a non-resident on the latest of three dates: your departure date, the date your spouse or dependants leave, or the date you become a resident of your new country. Keeping significant ties usually makes you a factual resident instead. Read our guide to Canadian tax residency and residential ties before you decide.

How do you file the return for the year you leave?

  1. Use the income tax package for the province or territory where you lived on your departure date. Former Quebec residents should use Revenu Québec.
  2. Enter your departure date on page 1 under Residence Information.
  3. Report your spouse’s or common-law partner’s net world income for the period you were a Canadian resident.
  4. Report world income for the part of the year you were a resident. For the non-resident part, report only certain Canadian-source income.

What is the departure tax?

The CRA says certain property is treated as sold at fair market value when you leave. Examples include shares, jewellery, paintings and collections. The deemed sale may create a capital gain. If the total fair market value of your property exceeds $25,000, complete Form T1161.

What happens to credits, accounts and benefits?

Item What the CRA says
Moving expenses Generally not deductible, with an exception for full-time post-secondary study abroad funded by a taxable Canadian scholarship, bursary, fellowship or research grant
Credits Federal and provincial credits are limited based on the resident and non-resident portions of the year
TFSA Can stay open. No contributions and no new room while you are a non-resident
Canadian income after you leave Payers withhold non-resident tax on certain income. You may elect under section 217 to report it on your return instead
Child benefit Generally not payable to a non-resident. Contact the CRA at once if you receive it after leaving
Bank accounts and payers Notify them that you are no longer a Canadian resident

See also the NR4 slip and the NR301 declaration for income paid to non-residents.

Common mistakes

  • Forgetting to tell the CRA your departure date when you do not need to file.
  • Ignoring the departure tax on shares and valuables.
  • Contributing to a TFSA after becoming a non-resident.
  • Keeping the Canada Child Benefit after you leave.
  • Leaving Canadian bank payers uninformed.

FAQ

How do I ask the CRA about my residency?

The CRA refers to Form NR73, Determination of Residency Status (leaving Canada), for this.

Do I still pay tax on Canadian income?

Canadian payers withhold non-resident tax on certain income. Read the CRA pages for the type of income you receive.

Can I come back later?

If you return and re-establish ties, your status can change. Check the CRA guidance for newcomers and returning residents. See taxes for newcomers to Canada.

Key takeaways

  • Your non-resident date is the latest of three events.
  • Certain property is treated as sold when you leave; use T1161 above $25,000.
  • Tell the CRA, banks and payers that you have left.

Last updated: October 2026. This guide is general information, not tax advice. Rules change, so check the CRA or a qualified tax professional.

Sources

  • Canada Revenue Agency: Leaving Canada (emigrants)

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