When an individual, who was resident in Canada for tax purposes, ceases to be resident in Canada, there is generally a deemed disposition of assets owned by that individual at their fair market value. Any resulting deemed gain must be reported on the final tax return filed as a resident.

This is commonly called “departure tax”. However, unlike the kind of “departure tax” that is levied at some airports, there is no tax official in Canada waiting to collect it when the Canadian expat leaves. Rather, it is calculated and payable as part of the normal income tax filing.

This article will provide an outline of the key points in relation to the “Departure Tax”. Read More

The question of whether or not a person is “resident in Canada” (which includes a person who is “ordinarily resident”) is undoubtedly the most pivotal issue under the Income Tax Act[1].

If the answer is “yes”, the person will generally be subject to Canadian tax on all worldwide income[2]; if the answer is “no”, then only certain, generally Canadian, sources, will be subject to Canadian tax[3].

The determination of residency for Canadian tax purposes is largely based on old UK tax cases that have been adopted and embraced by Canadian courts. By far, the leading Canadian decision in this area is that of the Supreme Court of Canada in Thomson v. Read More