Given the complexity of Canada’s departure tax rules, proactive planning before leaving Canada is critical. A comprehensive review of residency status, asset holdings, accrued gains, treaty implications, and post-departure tax exposure can help taxpayers reduce unnecessary tax liabilities and implement more efficient cross-border tax planning strategies before emigrating from Canada.

  • Departure tax under subsection 128.1(4) generally applies when an individual ceases to be resident in Canada for Canadian income tax purposes, including situations involving factual residence determinations, deemed residence rules, and treaty tie-breaker provisions under subsection 250(5)
  • Upon emigration, a taxpayer is generally deemed to dispose of certain capital property immediately before departure at fair market value and to reacquire such property at the same amount, potentially triggering accrued but unrealized capital gains for Canadian tax purposes
  • The deemed disposition rules do not apply to all property. Excluded property may include taxable Canadian real property, Canadian resource property, certain business property used in a Canadian permanent establishment, registered plans, pension entitlements, specified trust interests, and certain life insurance interests
  • Former Canadian residents may remain subject to Canadian taxation on Canadian-source income and taxable Canadian property following emigration, including potential Part XIII withholding tax exposure on dividends, pensions, trust distributions, and certain corporate redemptions or wind-ups
  • Pre-departure planning may involve residency analysis, utilization of subsection 128.1 elections, short-term resident exemptions under the 60-month/120-month rule, departure tax deferral elections under subsection 220(4.5), asset crystallization strategies, and cross-border structuring designed to minimize double taxation and future withholding tax exposure

    About this course

    • $170.00
    • 2 CPD hours
    • October 15, 2026 - 1:00 PM ET

    Instructor(s)

    Boris Volfovsky

    Partner, CPA, CA
    Boris has over 17 years of experience in public practice. Before becoming a partner at CPA Solutions LLP Boris worked at one of the big four national firms as a senior tax manager in the private enterprise group.

    Boris has vast experience in working with owner managers and their small, medium and large private corporations across industries.

    In addition Boris is also involved in the tax community through the facilitation of the In-Depth tax courses, facilitation of tax week under the former School of Accountancy and through presenting on various tax topics at YDCPAA, PD Consortium and AJAG.

    Manu Kakkar

    Manu has over 20 years of experience in taxation in both domestic and international, personal, and corporate taxation as well as expert witness reports and testimony. He is an award winning and prolific tax writer. His Master of Taxation thesis on butterfly reorganizations won 2 awards and was published in the Canadian Tax Journal. Manu has published and presented over 450 tax articles and presentations since 2001 across Canada. Manu is an authority in taxation as his name has been cited 41 times in the Income Tax Act.