Departure Tax on Crypto and Bitcoin When You Leave Canada

Is crypto deemed sold when you leave Canada?

Yes. On the day you stop being a resident, the Income Tax Act, s. 128.1(4)(b) treats you as selling each property you own at fair market value, just before you leave, and buying it back at the same value. Crypto is not on the list of exceptions, so it counts whether the coins sit on a Canadian exchange, a foreign exchange or a wallet only you control. That includes every kind of crypto-asset the CRA lists, such as stablecoins and NFTs (CRA).

The excluded property is Canadian real estate, business property used through a permanent establishment in Canada, registered plans such as RRSPs and TFSAs, and, if you were resident for 60 months or less in the 10 years before leaving, property you already owned when you arrived or inherited after arriving (CRA: dispositions of property). Moving coins to self-custody before you leave changes nothing: ownership on the departure date is what matters. Selling before you leave gives the same kind of gain on the same return, at the sale price; you then hold cash to pay the tax, and nothing is left to defer.

For an investor, the gain is a capital gain and 50% of it is taxable. It goes on Form T1243 and then Schedule 3 of your final resident return.

A crypto case is not simple when:

• you cannot prove what you paid for some coins;
• you trade often enough that the result may be business income, not a capital gain;
• you hold staking, lending or other positions where it is unclear what you own;
• your history shows earlier sales or coin-to-coin swaps you never reported;
• your new country may tax the same gain again when you sell;
• the tax is large and you want to defer it without selling.

Gather now: every exchange's full trade and transfer export, a list of your wallet addresses, and the price source you will use for the departure date.

Which value do you use on the departure date?

Use each coin's fair market value at the moment just before you stopped being resident, in Canadian dollars. The CRA accepts a reasonable method, used consistently and documented. Two methods it gives as examples: the price on the exchange you use, or an average of high, low, open and close prices across several high-volume exchanges.

If your price source quotes in US dollars, convert at the Bank of Canada rate for that day, or the closest earlier day it was quoted (s. 261). Save a screenshot or export of the price and the rate, with the date.

Which date that is, and why you cannot pick a low-price day: see the date you become a non-resident.

How do you work out cost across many wallets and exchanges?

Cost is the adjusted cost base: what you paid for a coin plus the costs of buying it (CRA). For an investor, units of the same coin are identical property, so the Act averages their cost: each purchase resets the cost per unit to total cost divided by units held (s. 47). If your trading is a business, cost follows the inventory rules instead (s. 10).

In practice:

1. Export the full history from every exchange, including closed accounts.
2. Match transfers between your own wallets so they are not counted as buys or sells.
3. Rebuild one running average cost per coin, across all wallets, in Canadian dollars.
4. Treat a coin-to-coin swap as a sale of one coin and a purchase of the other (CRA).

Missing history is the common trap. You must keep records that support each transaction (CRA records page). A cost you cannot support is open to challenge, and a lower cost means a larger gain. If an exchange has closed, gather what else shows the trades: bank transfers to and from it, emailed confirmations, and the on-chain record for your wallet addresses.

Rebuilding the history often turns up earlier sales or swaps that were never reported. Those belong on the returns for the years they happened, not the departure return; see unreported income and voluntary disclosure.

Capital gain or business income: does frequent trading change the result?

It can. If your crypto activity is a business, the deemed sale on departure gives business income, and business income is taxed in full, not at the 50% capital gains rate (CRA). The exception: coins held in a business carried on through a permanent establishment in Canada are not deemed sold, and their later sale stays taxable in Canada (s. 128.1(4)(b)); whether a trading setup is one depends on your facts.

The CRA weighs all the facts. Signs of a business:

A single transaction can also be business income if it was an "adventure in the nature of trade". The CRA decides on all the facts; the label on your return does not settle it.

Do coins in a loss position offset gains on the departure return?

Yes, for an investor. Every coin is deemed sold at the same moment, so losses on some coins offset gains on others on the same return. Allowable capital losses reduce taxable capital gains only, not employment or other income; an unused net capital loss can be carried back three years (CRA).

The superficial loss rule, which normally denies a loss when you or an affiliated person buy the same coin within 30 days before or after the sale and still hold it, does not apply to the departure deemed sale (s. 54). For older losses and credits, see unused credits and losses when leaving Canada.

Do staking or mining rewards, or free tokens, count?

Yes. Any coin you own on the departure date is deemed sold, however you got it. Separately, the rewards themselves are generally income: staking rewards on a centralized platform when credited to your wallet there, and, if you mine as a business, mining income when earned (CRA: mining and staking).

The CRA's crypto guide does not say what cost reward coins carry, and it does not address airdrops or tokens received for free. If you hold these, have the cost you use reviewed, because it sets the size of the departure gain.

Does crypto go on T1161, and did you owe T1135 for the year you left?

Crypto goes on Form T1161 when the total fair market value of your property on leaving, not counting cash, registered plans and pensions, and personal-use items under $10,000 each, is more than $25,000; crypto is not excluded (CRA). See the list of properties form, including late-filing penalties.

Form T1135 is separate. It applies if the cost of your specified foreign property was more than $100,000 at any time while you were resident (s. 233.3); the CRA lets you report only up to your departure date (CRA Q&A). Whether crypto is foreign property is unsettled: the Act covers intangible property held outside Canada, and neither the form page nor the CRA's T1135 questions and answers say where crypto is located. See which holdings count on T1135.

Can you defer the tax on crypto you keep?

Yes. Form T1244 lets you postpone paying departure tax on most property, interest-free, until you sell it; the election is due April 30 of the year after you leave. If the federal tax deferred is more than $16,500 ($13,777.50 for former Quebec residents), you must give the CRA adequate security (CRA). How to elect and what security works: deferring departure tax.

What happens if you sell the coins after you leave?

Your cost resets to the departure-date value (s. 128.1(4)(c)). A non-resident pays Canadian tax on gains from taxable Canadian property, Canadian employment or a business in Canada (s. 2(3)); crypto is not on the taxable Canadian property list unless it is property of a business carried on in Canada. So a later gain is generally a matter for your new country, which may or may not recognize the Canadian departure value as your cost.

If you deferred, the sale makes the deferred tax payable; what to tell the CRA and when to pay: deferring departure tax. If the coins fell after you left, see shares that fell after you left.

What records should you keep?

Keep enough to rebuild every coin's cost and the departure value. The CRA asks for:

Keep them at least six years from the end of the last tax year they relate to.

Example

These examples are illustrative and use Canadian dollars.

Long-term holder

Someone bought 2 BTC over several years for C$30,000 in total. On the departure date they are worth C$180,000. They report a C$150,000 capital gain on T1243, of which C$75,000 is taxable, though nothing was sold. The new cost is C$180,000.

Mixed bag

A leaver holds two coins. One has a C$40,000 deemed gain; the other a C$15,000 deemed loss. Both are deemed sold at the same moment, so the departure return shows a net C$25,000 capital gain, C$12,500 taxable.

Active trader

A trader makes hundreds of trades a month and holds coins for days. On departure the coins show a C$50,000 deemed gain. If the trading is a business and the coins are caught by the deemed sale, the full C$50,000 is business income; if it is capital, C$25,000 is taxable. The difference is C$25,000 of income.

Different for you?

• You trade often, use borrowed money, or the gain is large: whether it is business income or capital needs a judgment on your facts; get help with your departure return.
• You cannot rebuild your cost, or hold staking, lending or other positions: have the cost and holdings reviewed through individual tax help before you file.
• Your exchange history shows past sales or swaps you never reported: fix those years before or with the departure return; see unreported income and voluntary disclosure and get individual tax help.
• Your new country may tax your later sale: whether it accepts the departure value as your cost decides whether the gain is taxed twice; see deferring departure tax and get help with your departure return.
• Your crypto is held by your corporation: the company's coins are not deemed sold, but your shares are; see departure tax on private company shares.
• You also hold shares or ETFs: see the investment account guide.
• You want to keep the coins and defer the tax: see deferring departure tax.
• You need the form line by line: see Form T1243 and the full calculation example.
• You are moving cash abroad: see moving your money out of Canada.
• You have not filed your departure return yet, or missed a year: start with leaving Canada and individual tax help.