Mr. Winsome is a Canadian citizen and has been resident in Canada for the past 35 years. His company has offered him a position with its Australian branch, which Mr. Winsome has accepted. The position is a transfer and Mr. Winsome plans to remain in Australia for the rest of his life. Given the temperate climate in Australia, he thinks it will be a good country to retire in. Mr. Winsome has the following assets in Canada on December 15, 2020, the date of his departure from Canada: He sold all of his other assets. Which of the following is correct?

Question

Mr. Winsome is a Canadian citizen and has been resident in Canada for the past 35 years. His company has offered him a position with its Australian branch, which Mr. Winsome has accepted. The position is a transfer and Mr. Winsome plans to remain in Australia for the rest of his life. Given the temperate climate in Australia, he thinks it will be a good country to retire in. Mr. Winsome has the following assets in Canada on December 15, 2020, the date of his departure from Canada:  He sold all of his other assets. Which of the following is correct?

Quizplus · Accepted Answer

Under Canadian tax rules, individuals who cease to be residents of Canada are deemed to have disposed of their worldwide assets (with a few exceptions) at their fair market value on the day before departure. Therefore, Mr. Winsome will be deemed to have disposed of his mutual funds, sailboat, TNX Co. shares, and Bell Canada shares on December 15, 2020. The tax consequences of such disposition will depend on whether the assets have increased or decreased in value since their acquisition by Mr. Winsome. As for the Bell Canada shares, Mr. Winsome cannot elect to defer the gain until they are sold because he is no longer a Canadian resident. The rule allowing for such deferral is only available to individuals who continue to be Canadian residents after disposing of property.

Mr Winsome Is a Canadian Citizen and Has Been Resident