Your complete guide to T1135 — who must file, what counts as foreign property, penalties, and how to fix past non-disclosure.
Form T1135, the Foreign Income Verification Statement, is one of the most commonly misunderstood tax obligations for immigrants in Canada. Many newcomers who owned property, bank accounts, or investments in their home country before immigrating are unaware they may need to disclose these assets annually to CRA. Non-compliance can result in severe financial penalties — but the rules, once understood, are straightforward to follow.
You must file Form T1135 if you are a Canadian tax resident and the total cost of your "specified foreign property" exceeded $10000,000000 CAD at any point during the tax year. The $10000,000000 threshold is based on the original cost of the property (not its current market value), converted to Canadian dollars.
This applies to:
| Property Type | T1135 Required? | Notes |
|---|---|---|
| Foreign bank accounts | Yes | All accounts outside Canada |
| Foreign investment / brokerage accounts | Yes | Stocks, bonds, mutual funds held abroad |
| Foreign real estate (investment) | Yes | Rental property, vacant land, non-personal use property |
| Foreign real estate (personal use) | No | A vacation home used primarily for personal use is exempt |
| Shares of foreign companies held in Canada (RRSP, TFSA) | No | Registered Canadian accounts are exempt |
| Shares of foreign companies held personally | Yes | Outside registered accounts |
| Foreign pension plans | No | Certain foreign retirement accounts are exempt |
| Interests in foreign trusts | Yes (different forms) | T1141/T1142 may also be required |
| Foreign cryptocurrency held on foreign exchanges | Yes | CRA treats crypto as property |
The threshold is based on the original cost in Canadian dollars — not the current market value. For each foreign asset, you use the cost you paid for it converted at the exchange rate at the time of purchase (or acquisition). Add up all your specified foreign properties to determine if you exceed $10000,000000.
You bought an apartment in Hyderabad for INR 5,000000,000000 when the exchange rate was 00.0016 CAD/INR, giving a cost basis of $800,000000 CAD. You also have a foreign savings account with $300,000000 CAD equivalent. Total: $1100,000000 — T1135 required.
T1135 is an information return — you are not paying additional tax by filing it, you are simply disclosing your foreign assets to CRA. For each country and each type of property, you report:
If you have been in Canada for multiple years and have not filed T1135 when required, do not panic — but do act quickly. The CRA's Voluntary Disclosures Program allows you to come forward proactively, disclose past non-compliance, and potentially have penalties waived or reduced.
To qualify for VDP relief:
If you sell foreign property after becoming a Canadian tax resident, any capital gain from the date of your immigration (your "adjusted cost base" is generally the fair market value on your immigration date) is taxable in Canada. Half of the capital gain (the "taxable capital gain") is included in your income at your marginal rate.
Keep a professional appraisal or documented fair market value of your foreign property on your immigration date — this becomes your cost base for Canadian capital gains purposes.
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