Departure from Canada and obligation to declare certain properties

If you left Canada and you owned several properties before your departure, in addition to having to file a final income tax return as a Canadian resident, you may have additional tax obligations to fulfill.

List of properties

Moreover, if the fair market value of all the property you owned immediately before your emigration from Canada exceeds $25,000, you will have to complete Form T1161 – List of Properties by an Emigrant of Canada. This form is for information only and does not generate any tax consequences. However, penalties of up to $2,500 could be applied if it is not completed within the required time frame.

In addition, among the properties concerned, some could also be subject to a deemed disposition. If this is the case, they must be declared on a separate form.

Also, if you did not meet your Canadian tax obligations the year you left, you may be eligible for the voluntary disclosure program to rectify your situation.

Exceptions

Although most property you owned immediately before you left Canada must be declared, some exceptions exist, including:

  • cash;
  • the excluded rights, interests or interests of the taxpayer, including registered plans and pension plans;
  • property, which was not taxable Canadian property, that you owned the last time you became a resident of Canada or that you inherited after becoming a resident of Canada the last time, if you were a resident of Canada for 60 months or less in the 10 years preceding your emigration;
  • each personal-use item (clothing, household goods, automobiles, collectibles, etc.) whose fair market value does not exceed $10,000.

Need a hand? Do not hesitate to make an appointment with one of our tax experts or to submit your documents on our virtual platform. It will be our pleasure to assist you when you leave Canada and to validate which form(s) may apply to your situation.

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About the author

Olivier Custeau, tax expert, B.A.A., M. Fisc., EA

Holder of a bachelor's degree in business administration (B.B.A) from Université Laval and a master's degree in taxation (M. Fisc.) from the Université de Sherbrooke, Olivier has developed expertise in American and international taxation by working in a renowned firm. Over the years, he has developed a keen interest in US taxation. In fact, he was awarded Enrolled Agent status in 2019, the highest level a professional can attain to represent clients to the Internal Revenue Service (IRS). Recognized for his rigorous, dynamic and human approach, Olivier is an asset to the team.