Departure tax

[ReshiCa]

There is a departure tax when leaving Canada (like taxing all the stock gains one made). Does this also apply for someone who only paid, for example, one or two years of taxes? What's the best way to avoid this tax?

 

[scylla]

There is a departure tax when leaving Canada (like taxing all the stock gains one made). Does this also apply for someone who only paid, for example, one or two years of taxes? What's the best way to avoid this tax?

There's no departure tax.

 

[ReshiCa]

There's no departure tax.

Pretty sure there is: Departure tax

Or am I not understanding something here.

 

[shannon388]

There is a departure tax when leaving Canada (like taxing all the stock gains one made). Does this also apply for someone who only paid, for example, one or two years of taxes? What's the best way to avoid this tax?

Most brokerages require a Canadian residence, so when you depart, they will either freeze (I am not sure this is an option at all brokerages) or sell your positions, realizing any unrealized gain/loss, and thus you need to pay long/short term capital gain taxes on such gains held in taxable investment accounts. As far as I know, the length of your Canadian tax history is irrelevant.

No simple way to reduce this tax, you should consult a professional.

 

[canuck78]

Most brokerages require a Canadian residence, so when you depart, they will either freeze (I am not sure this is an option at all brokerages) or sell your positions, realizing any unrealized gain/loss, and thus you need to pay long/short term capital gain taxes on such gains held in taxable investment accounts. As far as I know, the length of your Canadian tax history is irrelevant.

No simple way to reduce this tax, you should consult a professional.

You don’t actually need to be a resident to be a tax resident. If you no longer plan on living in Canada and don’t want to be a tax resident you likely need to transfer your investments out of Canada. CRA is the one to determine whether you remain a tax resident even if you no longer live in Canada.

 

[ExResident21]

A lot of misunderstandings about Canada Departure Tax. Canada Revenue explains in detail when people stop to be resident - it's about not having significant residential ties, such as property, family, memberships. A bank account can be a secondary tie - but if you have nothing else in Canada, likely won't give you a tax residence.

I recommend anyone considering a move to or away from Canada to familiarize themselves with Departure Tax. All your property is deemed sold and you'll be taxed to oblivion if not careful!

Here's an article about what can happen to you because of a Canada Residence: Canada Revenue? Immigrants Beware!

 

[kyra15734]

hi, I have a question on the departure tax. I was in Canada from Aug 2019 - Jan 2023 (a little over 3 years to qualify for physical presence). I left to the US for work. During my stay in Canada, I continued to buy stocks using Fidelity - my US trading account. I don't have significant residential ties such as properties in Canada. Just a bank account. Did not invest in stocks etc in Canada. In Dec 2023, I became a Canadian citizen (I flew to Canada to attend my Oath ceremony). Do I still need to do departure tax for the stocks that I bought in the US during my time in Canada?

 

[jmbell]

There is no departure tax if you were in Canada for less than 60 months, but only in regard to assets that you owned at the date you moved to Canada. If you purchased them after, there may be departure tax, depending on the type of asset.