How do I leave Canada, and in what order?

Leaving Canada goes smoothly when things happen in the right order. Most steps take days, but tax is the one that catches people out: the day you stop being resident, Canada treats you as if you’d sold most of your investments, and you file one last return for the year you leave.

The order that works

1. 3–4 months before: fix your leaving date, check your lease end date and notice rules, get removal and pet transport quotes, and apply to HMRC for transfer of residence relief so your belongings can enter the UK free of duty and VAT
2. 2–3 months before: talk to a tax adviser (CPA) about departure tax if you own shares, funds, a business or property outside registered plans
3. Your notice at work: as your contract and your province’s employment standards say. Ask for your Record of Employment and final pay details in writing
4. Your lease: give written notice in time, using your province’s form if it has one
5. Your car: sell it and do the provincial transfer paperwork, or cancel plates and insurance
6. Your last weeks: utilities, phone, bank, mail. See What do I need to close before I leave Canada?
7. The spring after you go: file your final Canadian tax return

Your job and Employment Insurance

Unlike in the UK, Canadian notice rules are set province by province, so check your contract and your province’s employment standards before you pick a date. Your employer issues a Record of Employment when you leave. Keep a copy, but don’t plan on Employment Insurance: as a general rule, EI benefits aren’t paid for any period you’re outside Canada. The exceptions are short and narrow, such as a few days for a family funeral or a job interview.

Your home and car

Each province has its own tenancy law and its own notice rules for ending a lease, and Quebec’s lease rules are different again. Check your province’s tenancy board well before you hand in notice, and give it in writing. If you sell your car privately, finish the provincial transfer paperwork so you aren’t held responsible for the buyer’s tickets and tolls.

Departure tax

When you stop being resident in Canada, you’re treated as having sold certain property at its fair market value on that day and bought it straight back. Any gain is taxed in your final return, even though nothing was sold. This is often called departure tax.

• Report the deemed sale on Form T1243. You can elect on Form T1244 to put off paying the tax until you really sell, but above a set amount of tax the CRA asks for security
• If the total fair market value of everything you own when you leave is more than C$25,000, you must also file Form T1161, a list of your property. Cash, registered plans such as RRSPs and TFSAs, and personal items worth under C$10,000 are generally left out of the count
• The deadline to file and pay is 30 April of the year after you leave, or 15 June if you’re self-employed (tax is still due by 30 April)
• Canadian real estate isn’t caught by the deemed sale, but it stays taxable in Canada when you sell it

Your last Canadian tax return

For the year you leave, you file a return covering January to your departure date as a resident. Tell the CRA the date you left. From that date you’re generally not eligible for the Canada child benefit or the GST/HST credit. If you keep strong ties to Canada, such as a home or a spouse who stays, the CRA may still treat you as a factual resident, so check your status first.

RRSP, TFSA and Canadian pensions

• RRSP: it can stay invested. If you take money out as a non-resident, the bank withholds 25% unless a tax treaty lowers the rate. Withdrawals may also be taxable in the UK
• TFSA: you can keep it, and withdrawals stay free of Canadian tax. But you get no new room for years you’re non-resident all year, and any contribution made while non-resident is taxed at 1% a month until you take it out. The UK doesn’t treat a TFSA as tax-free, so its income may be taxable in the UK
• CPP: you can claim it later from the UK. A 25% non-resident tax applies unless a treaty reduces it
• OAS: paid abroad only if you lived in Canada for at least 20 years after age 18. More in How do we settle back into the UK?

If you might come back: permanent residence

Permanent residents must be physically in Canada for at least 730 days in every 5-year period. Days abroad can count in limited cases, such as living with a spouse or partner who is a Canadian citizen, or working full time abroad for a Canadian business or government. Fall short and you can lose PR status. If you might return, keep your PR card dates in mind, or talk to a regulated immigration consultant (RCIC) or lawyer before you go. Citizens have no such rule.