CRA forms
Form T1135 Explained: Reporting Foreign Property
$100,000the total cost of specified foreign property, at any time in the year, above which a Canadian resident has to file Form T1135.
Sources checked October 20263 min read
Key points
- Filed by Canadian residents whose foreign property cost more than $100,000 at any time in the year
- Simplified reporting under $250,000; full detail at $250,000 or more
- Personal use property, active business assets and registered plans are left out
- Filing late costs $25 a day, at least $100 and up to $2,500
Who files Form T1135
Form T1135, Foreign Income Verification Statement, is filed by a Canadian resident individual, corporation or trust, and by certain partnerships, whose specified foreign property had a total cost of more than $100,000 at any time in the year. The test uses cost, not market value, and it looks at the highest point in the year, so property bought and sold within the year can still trigger it.
The form is due on the same day as the filer's income tax return, and it can be filed electronically with the return. Filing it does not change the tax owing: foreign income is reported and taxed on the return whatever the cost of the property behind it.
What counts as specified foreign property
The definition is broad, and it catches property many people do not think of as foreign.
- Money and accounts held outside Canada
- Shares of non resident corporations, even when held through a Canadian broker
- Interests in non resident mutual funds and trusts
- Real estate outside Canada that is rented out or held as an investment, vacant land included
- Debts owed to you by non residents
What is left out
Several kinds of property never count toward the $100,000, however much they cost.
- Property used or held exclusively in an active business
- Personal use property, such as a vacation home used mainly by the family
- Shares of a foreign affiliate, which are reported on a different form
- Property held in an RRSP, TFSA or other registered plan
- Units of Canadian mutual funds, even those that hold foreign shares
Simplified or detailed reporting
Where the total cost stayed under $250,000 throughout the year, Part A, the simplified method, applies: the filer ticks each type of property held and names the top three countries by month end cost. At $250,000 or more at any time, Part B applies, and each property is reported in its category with its country, the highest cost in the year, the cost at year end and the income it produced. A filer uses one method or the other, never both.
Filing late costs $25 a day, with a minimum of $100 and a maximum of $2,500, for each year the form is late. Larger penalties apply where the failure is knowing or grossly negligent, and the CRA can reassess the foreign income for longer than usual when the form was not filed or was incomplete.
Quick answers
Does a vacation property in the United States go on Form T1135?
Not if it is used mainly for personal purposes. A property rented out to earn income is specified foreign property and counts toward the $100,000.
Do I report foreign shares held in my RRSP or TFSA?
No. Property held in registered plans is excluded.
When is Form T1135 due?
On the due date of your income tax return. For a corporation that is six months after its year end.
Related pages
Official sources
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Important. This article provides general educational information, not legal or tax advice for a specific business. Rules, administrative policies, rates and deadlines can change. Confirm your facts and current obligations with the responsible government agency and a qualified adviser.