# Departure Tax???



## josegalt (Dec 2, 2010)

We lived in BC for 5 years, having moved from Calif. At the end of three years we obtained dual citizenship.

As the 5 years was coming around I was informed by a CDN Chartered Accountant that we would be liable for a departure tax (based on our world wide assets) from Canada requiring the posting of a bond. As we had/have substantial assets in the US we left Canada back to the US before the 5 year window.

Amazing that our first immigration attorney NEVER mentioned this. Not an issue if you come to Canada with NO OUTSIDE ASSETS. But if you own a home in the US or part of a company, then this applies.

Are there any informed parties out there who know about this??? 

The way things are going in the US, we may go back and would like to know how to resolve this in advance.


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## josegalt (Dec 2, 2010)

*62 views and noones heard of this?*

forget taxes, think about the lifestyle


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## JohnSoCal (Sep 2, 2007)

josegalt said:


> forget taxes, think about the lifestyle


They probably are.


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## josegalt (Dec 2, 2010)

*Could you explain further....*



JohnSoCal said:


> They probably are.


They probably are what John???


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## JohnSoCal (Sep 2, 2007)

josegalt said:


> They probably are what John???


Thinking about the lifestyle obviously.


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## mountainman (Feb 3, 2010)

If at your date of departure, you have significant appreciated capital assets, you may be subject to a departure tax. If you do not have the funds to pay the tax, you must post acceptable security with the CRA. You must either pay the tax, or post security by April
30 (or June 15 if you have self-employment income) of the year following the year of your move.

As far as Canadian tax is concerned, you pay tax on worldwide assets whilst you are a resident of Canada. Basically, when you first became resident of Canada, your material worth would have been the value of your worldwide assets on that date. If those assets have appreciated in value by the time you left, there would be a tax liability.


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## JohnSoCal (Sep 2, 2007)

mountainman said:


> As far as Canadian tax is concerned, you pay tax on worldwide assets whilst you are a resident of Canada. Basically, when you first became resident of Canada, your material worth would have been the value of your worldwide assets on that date. If those assets have appreciated in value by the time you left, there would be a tax liability.


Canadians also pay tax on worldwide income if they live in the US. I don't know if this is true for living in other countries. My mother was a Canadian citizen living in the US and she had to pay tax on her global income. The Canadian government withheld 25% of her pension income from Canada even though her total income was pretty low.


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## djlondon (Jan 26, 2011)

*Get better advice*

Holy smokes, some of the tax comments and "advice" I see on this site are seriously wrong.

As soon as you become resident in Canada, you are liable for Canadian tax on your worldwide income. This is the same as almost any other country in the world that you would reside in.

The day you became resident in Canada, you were deemed to acquire all your assets at fair market value. So if you owned a home in a foreign country, you 'acquired' it the day you moved to Canada at whatever the value was at the time, not what the value was when you bought it.

The day you cease to be a resident of Canada, you are *deemed *to dispose of your worldwide assets, and any gain is taxable. This can surely present problems in some cases, such as when homes or shares in companies have appreciated significantly, but again, this is not an unusual policy. If you can, sell assets before you leave to give yourself enough liquidity to pay any tax on gains that might arise.

If you have left and do not normally reside in Canada, even if you are a Canadian citizen, there is no Canadian tax to pay on your worldwide income. The exceptions are if the income originates in Canada such as interest on bonds or a Canadian pension, in which case there is a withholding tax (eg 10% for interest income) which the vast majority of countries should recognize and give you a tax credit for so you don't pay tax twice on the income.

Hope that helps.


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