Cross-Border Tax · Guide
Canada's departure tax: what leaving actually costs
When you cease to be a Canadian tax resident, the CRA treats most of your property as if you sold it at fair market value the day you left — and taxes the built-in gains, even though you sold nothing. That deemed disposition is the "departure tax." RRSPs, Canadian real estate, and certain other property are exempt, and you can defer payment by posting security, but the year you leave is the most consequential tax year most emigrants ever file.
By the AnalytIQ Accounting team · Last reviewed: August 12, 2026
What gets deemed sold — and what doesn't
The deemed disposition hits most capital property: non-registered investments, shares of private companies, foreign property, crypto. Key exemptions include Canadian real property (taxed when actually sold instead), RRSPs/RRIFs and most registered plans, and certain employee stock options. TFSAs simply stop growing tax-free for US purposes — a separate planning point.
The forms: T1243 and T1161
Your departure-year return reports the deemed dispositions on Form T1243. If everything you own on leaving is worth more than $25,000, you also file Form T1161 — a list of your property — and the penalty for missing it is the same $25/day, up to $2,500, as the T1135. The departure date itself matters: it sets when Canadian residency ends and US residency begins, and a badly chosen date can double-tax a bonus or a stock sale.
You can defer the tax — with security
Election T1244 lets you defer paying the departure tax until the property is actually sold, by posting acceptable security with the CRA (no security is needed for the first $100,000 of deemed gains... in broad terms — the mechanics deserve advice). For founders, the lifetime capital gains exemption on qualified small business shares can shelter a large part of the gain if the departure is planned early enough.
Plan the year, not just the day
The wins come from sequencing: realizing or deferring gains before the departure date, dealing with the principal residence, timing RRSP/TFSA moves, and making sure the US side starts on the right basis (your property generally gets a stepped-up US cost basis at entry — but only if the two filings are coordinated).
Source: CRA — Leaving Canada (emigrants).
Rules at a glance · Moving, Residency and Departure
Not sure which applies to you? Get a free proposal or book 15 minutes.
What we take off your plate
Cross-border tax for people moving to or from Canada, handled.
- Departure-year return filed with the T1161, T1243 and treaty tie-break
- TFSA, RRSP and 401(k) or IRA moves sequenced before you cross the border
- Canadian and US returns prepared by one team
- Treaty positions and foreign tax credits lined up
- FBAR and T1135 foreign reporting
- ITIN applications certified in-house
Mistakes we fix
Three things that go wrong for people moving to or from Canada.
- Treating the 60-month rule as covering everything owned, not just pre-arrival property
- Contributing to a TFSA after becoming a US resident and triggering the 1% monthly penalty
- Skipping the section 216 election and leaving 25% withheld on gross rent instead of net income
Recognise one? Book a call and we will tell you what it is costing you.
How we can help · Moving, Residency and Departure
Where we do the work.
Fixed fees, quoted after a short discovery call. Canadian and US filings under one roof.
Free proposal
A fixed fee for your cross-border tax work, in writing.
- Tell us about your business. The form takes about a minute.
- A short discovery call. Fifteen minutes to confirm what you need.
- A fixed fee in writing. We reply within one business day. No hourly surprises.
- Canadian and US filings under one roof
- Cloud-first: QuickBooks Online, Dext, Wagepoint
- Brampton, Ontario, with clients across Canada and the US
Common questions.
How much is the departure tax?
There is no flat rate — it is your marginal tax rate applied to the capital gains deemed realized the day you leave. Someone with mostly registered accounts may owe nothing; a founder with appreciated private shares can owe a lot. That is why the calculation is worth doing before you commit to a date.
Does my house trigger departure tax?
Canadian real estate is exempt from the deemed disposition — it stays in the Canadian tax net and is taxed when you actually sell. The principal residence exemption has its own timing rules worth planning around.
What about my RRSP and TFSA?
RRSPs are exempt from departure tax and keep their treaty protection in the US. TFSAs are exempt from the deemed disposition too, but the US does not recognize their tax-free status — many emigrants close them before moving.
Related reading
Get it filed right.
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