ABOUT THE COURSE

A client telling you they are leaving Canada is not a single tax event. It is a sequence of technical decisions that begins with residency determination and runs through departure tax calculations, ongoing withholding obligations, corporate extraction planning, and the tax treatment waiting for them in the country they are moving to. Each step has its own rules, its own traps, and its own planning window that closes on departure. A client who emigrates without coordinated advice can face a deemed disposition they were not expecting, double taxation on retirement plan withdrawals, and corporate structures that create withholding problems the moment they become non‑resident. This course works through each part of the departure framework in the order a practitioner needs it.

Part 1 covers establishing non‑resident status under Canadian domestic law and under Canada's tax treaties:

• Severing Canadian residential ties: selling or giving up the home, moving contents, surrendering provincial health cards, closing bank accounts and memberships, giving up Canadian credit cards, and the significance of dependants remaining in Canada
• Establishing ties in the foreign country and minimizing time spent in Canada after departure
• The role of tax treaties: Canada has treaties with approximately 94 countries; a treaty tie‑breaker determination overrides Canadian domestic law and results in deemed non‑resident status under subsection 250(5)
• The treaty tie‑breaker sequence: permanent home test (permanent means generally one year or more; available means available for unrestricted occupancy), centre of vital interests where economic and social ties are closer, habitual abode, and nationality or competent authority determination as the final step
• Deemed non‑resident status under subsection 250(5): the deeming provision is non‑rebuttable; ongoing Canadian ties including visits and economic connections can co‑exist with non‑resident status, with important caution where the determination rests on centre of vital interests
• Treaty anomalies: the UAE treaty requires UAE citizenship for treaty residence; Hong Kong uses an ordinary residence or days‑spent test with no world income concept; the UK treaty permits UK resident non‑domiciled status with taxation limited to UK‑source income and remitted income; the US uses the substantial presence test or green card test, not a ties‑based analysis

Part 2 covers taxation on departure, from the deemed disposition through to deferral of the resulting tax:

• Deemed disposition of capital property at fair market value immediately before departure: the rule applies to all capital property except Canadian real estate held directly, interests in Canadian resident trusts, and RRSP/RRIF assets
• The resulting capital gain is realized immediately before departure; the capital gains exemption is available on a deemed disposition; income attribution rules do not apply to the deemed disposition
• TOSI rules and their application to capital gains on private corporation shares on departure: the exemption for small business corporation shares or shares with active involvement
• Principal residence exemption is available on departure; the foreign residence is also deemed disposed of and the principal residence claim is often overlooked on that foreign property
• No deemed disposition on an interest in a Canadian resident trust on departure: this is a useful planning point for clients holding appreciated assets inside a trust
• Payment and deferral of departure tax: the deemed disposition can create a capital gain and tax liability without actual liquidity; security can be furnished to CRA (letter of credit, Canadian government bonds, or mortgage on Canadian real estate) to postpone payment; no interest is charged until the property is actually disposed of; the process involves a lengthy negotiation and formal security agreement with CRA
• Foreign tax credit rules where foreign tax has been paid on the accrued gain: complex provisions with technical traps, particularly for foreign assets

Part 3 covers ongoing Canadian tax obligations after departure, including withholding on retirement plans, corporate distributions, and the use of planning structures:

• No deemed disposition on RRSP or RRIF assets on departure; non‑resident withholding tax applies on withdrawal at 25%, reduced by treaty to 15% for periodic payments; ongoing Canadian tax liability applies to taxable Canadian property including real estate held directly, and interests in corporations, partnerships, or trusts deriving value primarily from Canadian real estate
• Withholding tax on withdrawals from Canadian corporations: 25% statutory rate reduced by treaty to 15% for individuals or as low as 5% for dividends to a foreign corporation
• Pre‑departure planning with Canadian corporations: paying out a capital dividend before departure is tax‑free and reduces the corporation's value for deemed disposition purposes; paying out a dividend after departure attracts withholding tax at the lower treaty rate rather than full Canadian personal rates
• Section 119 credit for withholding tax on redemption of shares of a Canadian corporation that are taxable Canadian property: withholding tax is applied against the federal tax from the deemed disposition on departure, which can produce a refund of departure tax
• Use of a retirement compensation arrangement (RCA): deductible payment to Canco; actuarial determination required; 50% refundable tax on funds while resident; on withdrawal after becoming non‑resident, 25% non‑resident withholding tax applies; can produce substantial savings compared to Canadian personal tax rates on the same funds

This is a technically demanding area where mistakes are difficult to reverse after the fact. A client who departs without completing the residency analysis, without addressing the deemed disposition, or without extracting corporate funds at the right time and in the right form has fewer options once they are gone. The course gives a CPA the framework to identify each issue, structure the advice in the right sequence, and know when to bring in foreign country expertise before the departure date arrives.