What is Deemed Disposition?
When you officially cease to be a resident of Canada for tax purposes, the CRA applies a fictitious "deemed disposition" rule under the Income Tax Act. This treats most of your capital property as if you had sold it at its **fair market value (FMV)** on the date of departure, and immediately reacquired it for the same amount.
This triggers taxable capital gains on any accumulated growth up to your departure date, which must be reported on **Form T1243**.
Form T1161 Asset Reporting Evaluator
You must file **Form T1161 (List of Properties by an Emigrant of Canada)** if the total fair market value of all the properties you owned when you left Canada was **more than $25,000 CAD**.
Exempt vs. Taxable Departure Assets
Not all property is subject to deemed disposition or needs to be listed on Form T1161. Review the asset treatment chart below:
| Asset Category | Deemed Disposition? | Form T1161 Requirement? |
|---|---|---|
| Canadian Real Estate | Exempt (Taxed when actually sold later) | Exclude |
| Registered Accounts (RRSP, TFSA, FHSA, RESP) | Exempt | Exclude |
| Global Stocks & Crypto (non-registered) | Taxable (Triggers departure capital gain) | Include (If total specified assets > $25,000) |
| Personal Belongings & Cars | Exempt (Unless individual FMV > $10,000) | Exclude (Unless individual FMV > $10,000) |
Deferring Departure Tax (Form T1244)
If you face a significant tax bill on your deemed capital gains but do not want to sell your assets to pay it, you can elect to defer payment.
- Form T1244: File **Form T1244 (Election to Defer the Payment of Tax)** with your final tax return to defer tax payment.
- Providing Security: If your deferred tax amount exceeds $25,000 CAD (or $16,500 CAD in Quebec), you must provide the CRA with adequate security (e.g., bank letter of credit or asset charges) to guarantee the deferred tax. No interest is charged on deferred departure tax.