Do I file Form T1243 if I sold nothing before leaving?
That is exactly when it is filed. On the day Canadian residency ends, capital property is treated as sold and reacquired, so a tax liability arises with no sale, no buyer and no cash. The computation of that deemed disposition is what the form sets out. The two consequences people are unprepared for are that tax can be due on assets they still hold and never intended to sell, and that the figures rest on values at the departure day rather than on anything a market has confirmed. Both are reasons to prepare the computation deliberately, with the valuation evidence assembled while it still exists.
Who has to work out departure tax after emigrating from Canada?
An individual who ceased to be a Canadian resident and held capital property on the day that happened. It is not limited to the wealthy or to people with businesses: a portfolio, an interest in a private company or a holding inherited years earlier can all bring the computation into play. The obligation sits with the emigrant personally, in the departure-year return, and it is decided by the facts of residency rather than by citizenship or by which country now taxes your salary. Where a couple leaves together, each person computes their own position on their own interests in the property.
Do private company shares need a valuation on departure?
If they are inside the deemed disposition, their value on the departure day has to be established, and a number written down without support is the part of a departure filing most likely to be challenged. Nothing has been sold, so there is no price to point to; the value has to be built from the company's own position at that date. That means financial statements, the basis on which the business would be valued, and any contemporaneous transactions in the shares. Assembling that evidence at the time is far easier than producing it years later under examination, and it is the difference between a defensible figure and an assertion.
Is every asset I own caught by the deemed disposition?
No, and working out which side of the line each holding falls on is the substance of the job. Some property is inside the deemed disposition and taxed on departure. Other property keeps its Canadian tax hooks instead, meaning Canada continues to have a claim and the tax arises on an actual disposition later rather than on the day you leave. The two treatments lead to very different outcomes for cash flow and for later filings, so we go asset by asset from the ownership documents rather than applying a general rule, and we record the reason for each classification.
Do I file Form T1243 if the deemed sale shows a loss?
The computation is still made. A deemed disposition can produce losses as well as gains, and the position across your holdings has to be worked out before you know which you have. Leaving the computation out because you expect no tax has two costs. You lose the chance to establish the figures while the evidence for them is current, and you leave the departure year without the record that later Canadian questions about those same assets are answered from. Prepare it, file it, and keep the valuation material with it, whichever way the arithmetic comes out.
Does leaving partway through the year change the departure tax date?
The calculation is taken on the day Canadian residency ends, not at the end of the calendar year, and that date is determined by where your ties actually were rather than by a travel document. It drives everything that follows: which property is treated as sold, and the value each holding is measured at. A date settled casually for one purpose and differently for another produces a filing that argues with itself. We establish the residency cessation date on the facts first, in writing, and then build the computation as at that day.
Would a state exit tax even be constitutional?
A levy imposed purely for leaving would face serious challenge under the constitutional protections for interstate commerce and the right to travel, which is part of why proposals stall. But that is not what most states are doing. Taxing income that was earned or sourced within the state before you left is conventional, long upheld, and where almost all real disputes sit — which is why the useful question is sourcing and domicile, not constitutionality. See state non-resident returns.
What is the US exit tax?
A charge that applies when a US citizen renounces or a long-term permanent resident gives up their status and meets one of the covered-expatriate tests — an income test, a net-worth test, or a failure to certify five years of compliance. A covered expatriate is treated as having sold worldwide assets on the day before expatriation, and Form 8854 is what reports the position. The tests turn on figures that are indexed, so they are read for the year of expatriation. See Form 8854.
