T1135 Foreign Income Verification Statement

The T1135 Foreign Income Verification Statement is a Canada Revenue Agency (CRA) tax form. The objectives of this reporting requirement are:

1. to enhance compliance with tax laws that require reporting of foreign-source income
2. to increase taxpayers' awareness of these laws
3. to provide information to the CRA for the purpose of verifying taxpayers' compliance with these laws
4. to better target international tax evasion and aggressive tax avoidance

Generally the Form T1135 must be filed on or before the due date of the taxpayer's income tax return. The penalties for not filing a T1135 are onerous.

This article is intended to provide an overview of the T1135 form. It is a CRA requirement to accurately provide a T1135 form when circumstances dictate. The specific details of filling out this form are beyond the scope of this article and you should consult your tax preparer and the CRA's website for complete details.

Do I need to report?

You must file a T1135 if are a Canadian resident who at any time during the year owned specified foreign property costing more than $100,000 CAD. The cost amount is defined in subsection 248(1) of the Income Tax Act and generally is the adjusted cost base and not the fair market value.

How do I fill it out and file it?

Form T1135 has a two-tier information reporting structure for specified foreign property. Part A is a simplified reporting method for taxpayers who held specified foreign property with a total cost of more than $100,000 CAD, but less than $250,000 CAD, throughout the year. This reporting method allows taxpayers to check the box for each type of property they held during the year rather than providing the details of each property. Part B, the detailed reporting method, applies to those taxpayers who, at any time during a year, held specified foreign property with a total cost of $250,000 or more.

Individuals can file Form T1135 electronically (EFILE or NETFILE) for the 2015 and later tax years.

What property has to be reported?

Form T1135 requires specified foreign property is defined in subsection 233.3(1) of the Income Tax Act to be reported. Shares of non-resident corporations held through a broker (Canadian or foreign) are specified foreign property and should be reported, regardless of whether the shares are held through a broker. Many Canadian discount brokerages include a T1135 reporting package as part of their annual tax preparation materials.

Are there exclusions?

Common exclusions are a personal-use property as defined in section 54. or specified foreign property (i.e. US stocks) held in an Registered Retirement Savings Plan (RRSP) or a Tax-Free Savings Account (TFSA).

See also

• Tax planning
• IRS W-8 BEN form

Further reading

• Financial Wisdom Forum topic: "T1135 Form"
• Financial Wisdom Forum topic: "T1135 - Just the beginning?"
• Financial Wisdom Forum topic: "in Form T1135, is $100K foreign assets at any given time?"

External links

• T1135 Foreign Income Verification Statement - Canada.ca