Who this is for
Canadians and former residents who moved to India, the Gulf, the United States or elsewhere. People who never filed a departure year, kept filing out of habit, or stopped filing without telling anyone. Also people planning to leave.
The five points
-
Ties decide, not forms. You become a non-resident when you leave to live in another country and sever your residential ties. The main ties are a home in Canada, a spouse or partner here, and dependants here. Secondary ties count too: bank accounts, a driver’s licence, provincial health coverage, memberships.
-
If you kept significant ties, you may still be a resident. A factual resident reports worldwide income in Canada every year. A spouse and home left behind in Surrey while you work abroad usually means Canada still considers you resident.
-
If you cut ties, you were a non-resident from the departure date. A final return is due for the year you left, showing the departure date and income up to it. After that, only Canadian-source income is taxed here, often through withholding at source on pensions, dividends and rent.
-
Departure has its own tax. Deemed disposition: certain property is treated as sold at market value on the day you leave. If your property totalled more than $25,000, Form T1161 listing it was due with the final return. Some property, like Canadian real estate and RRSPs, is excluded from the deemed sale.
-
Benefits should have stopped. The Canada Child Benefit and the GST credit (now the Canada Groceries and Essentials Benefit) are for residents. Payments received after departure can be reclaimed by the CRA.
One thing many people do not realize
Leaving Canada can trigger a tax bill on the way out. On the day you become a non-resident you are treated as having sold certain property at its market value, even though you sold nothing. If the total value of your property was over $25,000, a list of it was due with your final return. People who left years ago without filing a departure year often discover this obligation only when they try to sell something or return.
What to prepare
- The date you left and the country you moved to
- What you kept in Canada: home, spouse, dependants, accounts, licence, health card
- Returns filed since you left, if any
- Canadian income since departure: rent, pensions, investments
- Property you owned on the day you left, with approximate values
When professional help may make sense
Almost always. The fix for a missed departure year, or for years of unreported worldwide income, can involve the Voluntary Disclosures Program. The status question itself can be put to the CRA on Form NR73. These are decisions to make with advice, before the CRA raises them.
How Rex Tax may be able to help
We work out your residency position from the facts. We prepare the departure-year return and the T1161 where needed, and handle the non-resident or resident filings since. We tell you when a cross-border specialist is the right next step.
Official sources
This guide is general information, not advice about your situation. It reflects the rules for the 2025 and 2026 tax years. It has not yet been reviewed by a practitioner. The information was checked against the official sources listed above on the date shown. Rules change. Check the official sources above or ask us. How we prepare these guides.