I am currently not a tax resident of Canada and have never been. I own some US equities and real estate property in the UAE.
If I
(1) become a tax resident of Canada next year,
(2) never sell any of these properties and
(3) leave within 60 months to become a tax resident elsewhere,
would these be subject to a departure tax?
When you leave Canada, you are considered to have sold certain types of property (even if you have not sold them) at their fair market value (FMV) and to have immediately reacquired them for the same amount. This is called a deemed disposition and you may have to report a capital gain (also known as departure tax).
The property you owned before being resident in Canada is not included.
Some of the exceptions to tax upon leaving are:
- Canadian real or immovable property, Canadian resource property, and timber resource property
- Canadian business property (including inventory) if the business is carried on through a permanent establishment in Canada
- pension plans, annuities, registered retirement savings plans, pooled registered pension plans, registered retirement income funds, registered education savings plans, registered disability savings plans, tax-free savings accounts, deferred profit-sharing plans, employee profit-sharing plans, employee benefit plans, salary deferral arrangements, retirement compensation arrangements, employee life and health trusts, rights or interests in certain other trusts, employee security options subject to Canadian tax, interests in certain personal trusts resident in Canada, and interests in life insurance policies in Canada (other than segregated fund policies). For a complete list, refer to the definition of “excluded right or interest” in Subsection 128.1(10) of the Income Tax Act
- the property you owned when you last became a resident of Canada or property you inherited after you last became a resident of Canada if you were a resident of Canada for 60 months or less during the 10-year period before you emigrated
