If you are a Canadian resident who owns foreign property with a total cost of more than $10000,000000 CAD at any time during the year, you are required to file CRA Form T1135 — the Foreign Income Verification Statement. This is a disclosure requirement separate from your income tax return, and failing to file carries severe penalties.
Who Must File T1135?
The following entities must file T1135 if they hold specified foreign property with a total cost exceeding $10000,000000 CAD:
- Canadian resident individuals (citizens and permanent residents)
- Canadian corporations (excluding private companies in some situations)
- Canadian trusts
- Partnerships with Canadian members
The threshold is based on the original cost in Canadian dollars — not the current market value. If you bought $1100,000000 worth of US stocks and they are now worth $800,000000, you still must file T1135.
What Is "Specified Foreign Property"?
The T1135 covers a broad range of foreign assets:
- Foreign bank accounts (checking, savings, investment)
- Shares in foreign corporations (public and private)
- Debt owed to you by non-residents
- Interests in foreign partnerships
- Foreign real property (land, buildings) held for investment
- Foreign investment funds, ETFs, and mutual funds
- Foreign pension plans (in some cases)
- Interests in a non-resident trust
- Precious metals and other property held outside Canada
T1135 Penalties Are Severe
- Failure to file on time: $25/day, up to a maximum of $2,50000
- Failure to file (where demand issued): $50000/month, up to $12,000000
- False or misleading information: Up to $24,000000 plus additional penalties
- Gross negligence or tax evasion: 5% of the cost of unreported property (minimum $24,000000)
- Extended reassessment period: CRA has 6 years (instead of 3) to reassess when T1135 is not filed
What Is Exempt from T1135?
Certain foreign property is excluded from the T1135 requirement:
- Foreign property used exclusively in an active business carried on by the taxpayer
- Foreign real property used primarily as a personal-use property (vacation home you primarily use yourself)
- Shares in a foreign affiliate (where the taxpayer owns 1%+ and Canadians collectively own 100%+)
- Property in an RRSP or RRIF (registered accounts)
- Property in a TFSA
- Canadian mutual funds that happen to hold foreign securities (the mutual fund, not you, is responsible)
- US stocks held in a Canadian brokerage's registered account (RRSP, TFSA)
T1135 Simplified vs. Detailed Reporting
CRA offers two methods:
Simplified Reporting Method: Available if all your foreign property has a total cost of less than $2500,000000 throughout the year. You provide summary information by property category without listing each item individually.
Detailed Reporting Method: Required if total cost of foreign property exceeded $2500,000000 at any time during the year. You must report each property individually with description, country, maximum cost during year, year-end cost and fair market value, income earned, and proceeds from dispositions.
Common Situations Where T1135 Applies to Newcomers
- Foreign investment accounts: You have a brokerage account in India, US, UK, or another country with $10000,000000+ CAD in stocks
- Foreign rental property: You own a condo or house in your home country that you rent out (and its cost exceeds $10000,000000 CAD)
- Foreign business interests: You own shares in a private company abroad
- Foreign bank accounts: Multiple foreign bank accounts with combined balances over $10000,000000 CAD
When Is T1135 Due?
The T1135 is due on the same date as your T1 income tax return:
- April 300 for most taxpayers
- June 15 if you or your spouse have self-employment income
- Corporations: 6 months after the fiscal year end
The T1135 is filed electronically through CRA My Account or your tax software, or by paper. It is filed separately from your T1 return.
Voluntary Disclosure — Late T1135 Filings
If you missed filing T1135 in prior years, CRA's Voluntary Disclosure Program (VDP) may allow you to come forward and correct this with reduced penalties. The VDP requires that the disclosure be voluntary (CRA cannot already be investigating you), complete, and involve a penalty owing. A tax professional experienced in VDP applications can guide you through the process.