If you live in Canada you might be surprised to learn that Canada is one of the few countries in the world that imposes a tax on emigration (departure tax). When a Canadian taxpayer leaves Canada for a long period of time (or permanently), they may be considered to have disposed of certain personal properties at fair market value. When required, these assets (and any subsequent gain or loss from the deemed disposition) will need to be reported to the Canada Revenue Agency on their proper forms. Today the chartered professional accountants at AG Tax will be covering one such form, the T1161 (List of Properties by an Emigrant of Canada).
What is Form T1161?
Form T1161 (List of Properties by an Emigrant of Canada) is a disclosure form to report all of the ‘qualifying or reportable properties’ by an emigrating Canadian resident. The T1161 simply lists qualifying property, and does not report any gain or loss on the deemed disposition like the T1243 does (click here to read more).
Who needs to file the T1161?
If the taxpayer ceases to be a resident of Canada, and the fair market value of all reportable properties is over $25,000, they are required to file T1161.
What is reported on the T1161?
Once the $25,000 fair market value threshold has been met, all assets must be reported (except for certain assets that are excluded). The definition of “reportable properties” excludes any personal use property with a value of less than $10,000, cash, certain deferred benefit plans, and other real property. Consult your AG Tax advisor regarding whether your assets need to be reported as it may vary on a case by case basis.
Penalties for Late Filing Form T1161?
By not filing this form by April 30th of the year following the year of departure, a Canadian emigrant is liable to a penalty of $25 per day to a maximum of $2,500 (minimum penalty of $100).
AG Tax LLP Can Help
If you have any tax-related queries, need assistance with tax planning or filing your tax returns please contact us. Our team comprises of highly experienced tax professionals with extensive knowledge of U.S. and Canadian tax laws as well as cross-border compliance
Furthermore, as a full service accounting firm, AG Tax assures complete assistance with even your most complex tax needs.
We can assist with:
- Canadian Personal and corporate tax returns
- Cross Border Taxation and Business Planning
- U.S. Personal and Corporate Taxation
- Disclosure of Foreign Assets and other information filings
- Retirement planning
- State Sales Tax & E-commerce Taxation
- Estate Planning, Inheritance tax advice
To obtain a quote or to arrange for a consultation to discuss your tax related queries, please contact us at:
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Disclaimer: The information in this publication is accurate as of the time of its publication. AG Tax assumes no responsibility for changes to tax legislation subsequent to the publication of this document. The information provided is for general information purposes only and should not be acted upon without seeking professional advice. If you would like to engage our services, please contact our staff and obtain authorization to send our firm confidential information. A client relationship is not created by the transmission of information. A client relationship is only formed with our firm when a scope and engagement letter signed by the firm and the potential client detailing the terms of engagement is present.