Non-Resident of Canada: The Date Your Tax Residency Ends

When do you become a non-resident of Canada for tax purposes?

You usually become a non-resident of Canada on the latest of three dates (CRA: Leaving Canada):

The CRA's technical guidance puts it as the date you sever your residential ties with Canada, which is usually the latest of those dates (Folio S5-F1-C1, ¶1.22). It is a question of fact, decided on your whole situation. It is the date of departure you enter in the residence information on page 1 of your return (CRA: Leaving Canada).

When you become resident in the new country depends on that country's own rules; a residence permit or registration, a home there and the start of work are the usual markers.

A case is not simple when the move happens in stages, a spouse or home stays behind, you are returning to a former home country, or a tax treaty makes you resident elsewhere. The date also fixes the value used for departure tax, so a wrong date can change the tax by a large amount.

Gather: flight or travel records for each family member, the lease or purchase of your home abroad, foreign residence or tax registration, the sale or lease dates of your Canadian home, and your new job's start date.

Whether your ties make you a non-resident at all is covered in Canadian tax residency.

Is my non-resident date my flight date?

Usually only if, by the time you fly, your spouse or common-law partner and dependants have left, your home in Canada is no longer available to you, and you have settled in the new country. If not, the CRA generally uses the later date; the exception is returning to a country you lived in before Canada (below) (CRA: Leaving Canada).

The most common trap is using the flight date on the return while the family and house stay in Canada for months. The CRA can treat you as resident until those ties end, so income earned abroad in the gap would then stay on your Canadian return as world income.

How do the three dates combine when my spouse and children stay behind?

The three dates combine into one: the latest of them. If you leave in March and your spouse and children follow in July, your non-resident date is generally the July date, even if you were working and living abroad from March (Folio S5-F1-C1, ¶1.22).

For each spouse's own date, departure tax and jointly owned property, see spouses leaving Canada on different dates. If the family is staying in Canada with no plan to follow, see family stays in Canada while you work abroad.

What if I go back to the country I lived in before Canada?

If you were resident in another country before you came to Canada and you leave to re-establish residence there, you usually become a non-resident on the day you leave Canada. That holds even if your spouse or common-law partner and dependants stay in Canada for a while, for example to sell your home or let the children finish the school year in progress (CRA: Leaving Canada; Folio S5-F1-C1, ¶1.23).

The exception covers a family member staying temporarily. A spouse who stays indefinitely, or a home kept available for your return, may still point to continued residence.

If you were resident in Canada for 60 months or less in the 120 months before you leave, property you owned when you arrived, or inherited since, may escape the deemed sale; see leaving Canada within five years of arriving. If a work permit is ending, see leaving Canada after a work permit ends.

I moved in stages: which step sets the date?

The step that ends your last significant tie usually sets the date. A job abroad that starts first does not by itself end Canadian residence: setting up ties in another country does not, on its own, mean you stopped being resident in Canada (Folio S5-F1-C1, ¶1.21).

How long you stay abroad is not decisive: no particular length of stay automatically makes you a non-resident, and a planned return, such as a job waiting for you in Canada after a posting abroad, makes the ties you kept count more (Folio S5-F1-C1, ¶1.17). Whether a home left behind counts as a tie depends on whether it is still available to you, which the residency guide explains.

Does a treaty tie-breaker change the date?

It can. If you are still a resident of Canada under Canadian rules but a tax treaty's tie-breaker rules make you resident only in the other country, you are generally deemed not resident in Canada from that time (Income Tax Act, s. 250(5)). The CRA says the rules for ceasing to be resident, including the deemed sale of property, then apply from that date (Folio S5-F1-C1, ¶1.37–1.38).

So a treaty date can come before the date your family or home leaves Canada. Applying a tie-breaker depends on the treaty's wording and your facts; this is a case for professional judgment. For a CRA opinion, see asking the CRA to decide your residency with Form NR73 (CRA: Determining your residency status).

What does the non-resident date control?

The non-resident date splits your tax year in two and fixes the moment of the deemed sale. Almost everything on the departure-year return depends on it.

For the detail, see the part-year return in the year you leave, Form T1243 for the deemed sale, RRSP and TFSA contributions after leaving, a Home Buyers' Plan balance when you leave and benefits after leaving Canada.

Which records prove the date if the CRA asks?

Records that show when each tie ended and when your new residence began. Because the date is a question of fact, the CRA looks at evidence, not the date you write on the return (Folio S5-F1-C1, ¶1.22).

• Tickets, boarding passes or entry stamps for you, your spouse and your dependants
• The lease, purchase deed or move-in record for your home abroad
• Foreign residence registration, work permit or visa, and the new country's tax registration
• The sale closing date, or the lease to an arm's-length tenant, for your Canadian home
• School enrolment abroad for children, and the new employment contract
• Dates you closed or changed Canadian accounts, memberships and provincial health coverage

Keep these with the departure-date values of your property. To give the CRA the date, see telling the CRA you are leaving Canada.

Can I pick a date that suits me, such as January 1 or a low market day?

No. The non-resident date is the date your residential ties actually ended, a question of fact (Folio S5-F1-C1, ¶1.22). Writing a different date on the return does not change it, and the deemed sale uses fair market value at the real time (s. 128.1(4)).

The date follows when you actually move and when your ties actually end, and every date must be supported by records. If the CRA later disagrees with the date, see the CRA still thinks you are a resident.

Example

These scenarios are illustrative; amounts are in Canadian dollars.

Staged move to London

A person starts work in London on 1 March and moves into a London flat that day. The spouse and children stay to finish the school year and leave Canada on 15 July. Under the latest-of-three-dates rule, the non-resident date is generally 15 July. With a home in both countries from March, the treaty tie-breaker also needs checking; with the family still in Canada it usually points to Canada, so the July date generally stands. London salary from March to mid-July goes on the Canadian return as world income, with a foreign tax credit question for UK tax paid on it.

Returning to Seoul

A person who lived in Seoul before coming to Canada moves back there on 10 May. The spouse stays six weeks to sell the condo, then follows. Under the former-country rule, the non-resident date is generally 10 May, not the spouse's later departure.

Market drop between two possible dates

A person holds shares with a cost of C$300,000. They were worth C$500,000 on 1 April and C$420,000 on 1 June. If ties really ended on 1 April, the deemed gain is C$200,000; if on 1 June, C$120,000. The gain follows the date the facts support, so records must prove which date is real; writing 1 June on the return when the family and home left in April does not make it so.

Different for you?

• Your move happened in stages, or your spouse, children or home stayed behind: the date turns on facts; see spouses leaving on different dates and get individual tax help.
• You are returning to your former home country while family stays to sell the home or finish school: the date can come before they leave; get individual tax help.
• A treaty tie-breaker may make you resident elsewhere first: see asking the CRA to decide your residency and get individual tax help.
• You are not sure your ties are cut at all: start with Canadian tax residency.
• You need the full departure checklist and forms: see leaving Canada.
• The CRA disagrees with your date years later: see the CRA still thinks you are a resident.
• You are moving to the US and need your US start date: see moving from Canada to the US.