Equity cap gains tax after moving to Canada

[napstolean]

Several sources - nelsona's helpful responses to Veronica in this forum, and the KPMG personal tax guide are examples - state that, after moving to Canada, capital gains on publicly-traded, non-registered (e.g., non RSP, 401K, or IRA) shares are calculated not using the price paid for the shares, but rather using a cost basis calculated using the share price on the day you moved to Canada. For example, buy shares in 2000, move to Canada in 2001, and sell shares in 2002 while a resident of Canada, and the cap gain is calculated only on the share price appreciation only after entering Canada.

But what's this based on? Where does CRA say this is how it's done? What regulation/tech bulletin/ case precedent do I hang my hat on when I try to convince my local CRA assessor this is legit? Insofar as this limits the tax to the gain realized while in Canada, it makes some sense, but mere logic alone is probably not enough to convince an assessor.

Many thanks. BTW, this is a great forum, a real gem for those trying to navigate this tricky cross-border minefield.

[nelsona]

The 'precedent' is clearly explained in the "newcomers" guide from CRA.

Also looked for "deemed acquisition" at CRA. It is the exactly analoguous sitiation as the Deemed disposition on one's assets when leaving canada.


Why this strategy is extremely powerful for those leaving US, who are not US citizens, is that it allows for pre-arrival cap gains to escape taxation altogether, since US only taxes capital gains of Cdn residents who are US citizens.
<i>nelsona non grata... and non pro</i>