FOREIGN PROPERTY

​When filing your Income Tax and Benefit Return, the CRA asks the following question, “Did you own or hold specified foreign property where the total cost amount of all such property, at any time in 2021, was more than CAN$100,000? If yes, complete Form T1135, Foreign Income Verification Statement.”
 
WHAT IS FORM T1135: FOREIGN INCOME VERIFICATION?
CRA uses this form to obtain information on the amount of certain types of assets held by Canadian residents outside Canada.
 
WHO IS REQUIRED TO FILE?
It must be completed every year that you owned “specified foreign property” (SFP) with a total cost amount of more than $100,000 (CAD) at any time during the year. This applies to individuals, trusts, corporations and partnerships.
 
WHAT TYPES OF PROPERTY ARE DECLARED?
Cash in foreign accounts, foreign stocks, real estate you own outside Canada and life insurance coverage from foreign insurers. See CRA’s list of “specified foreign property”.
 
WHAT TYPES OF PROPERTY ARE NOT DECLARED?
Personal-use property such as vacation properties, property exclusive to your active business, foreign property held in your RRSP and Canadian mutual funds which hold foreign content. See CRA for full list.
 
WHEN IS THE FILING DEADLINE?
Form T1135 is due on the same date as the income tax return for individuals, corporations and trusts. It can now be filed electronically and is filed separately from the tax return.

ARE THERE PENALTIES FOR NOT REPORTING FOREIGN INCOME?Failure to file Form T1135 by the due date results in a penalty of $25 a day up to a maximum of $2,500 per year you had to file the form. Taxpayers who have not filed the T1135 form or provided inadequate information can file a Voluntary Disclosure.
 
It is important to keep good records of all foreign holdings to reduce the time, frustration and cost of completing this form. Errors or omissions, even if accidental, could result in unwanted penalties. For more information, the CRA has a great Question and Answer section on their website that addresses many of the more commonly asked questions about Form T1135.