Form T1135 Foreign Income

Written by Shannon Warawa, CPA, CA on Aug. 7, 2018

Form T1135 Foreign Income Verification Statement must be filed if you, your corporation, trust or partnership, owned or held foreign property with a cost amount of more than $100,000 at any time in the year even if some or all of the property was sold before the year of the year.

The form is used to obtain more information on foreign property in an effort “to better target international tax evasion and aggressive tax avoidance” and is filed at the same time as your tax return.

Foreign investment property that must be reported on the T1135 includes but is not limited to:

  • amounts in foreign bank accounts
  • shares in foreign companies, even if held in a Canadian brokerage
  • shares in corporations resident in Canada held outside Canada (e.g. in a brokerage account in another country)
  • interests in non-resident trusts
  • real estate situated outside Canada (unless mainly held for personal use and enjoyment)
  • other income-earning foreign property

Foreign investment property does not include:

  • property held in a registered account such as an RRSP or TFSA
  • any property used mainly for personal use and enjoyment, such as a vehicle, vacation property, jewelry or artwork
  • assets used only in an active business, such as business inventory or the equipment and building used in a business

Changes for 2015 and later taxation years have streamlined the reporting requirements.  If the cost amount is more than $100,000 and less than $250,000 throughout the year, the assets can be reported under a simplified reporting method.  Under this method, country codes for the three countries with the highest cost amount during the year as well as the gross income from all specified foreign properties and the gain (loss) from the disposition of all specified foreign property must be reported.

If the cost amount is more than $250,000, the assets must be reported under the detailed reporting method and the following information must be provided:

  • a description of the property
  • country code
  • the maximum cost amount during the year, the cost at the end of the year, the gross income and the gains (losses) on disposition

For frequently asked questions and related topics, visit www.cra-arc.gc.ca, search “Form T1135” and click on “Questions and answers about Form T1135”.

For more detailed information on the T1135 form, please call KWB at 780-466-6204 or email us by clicking here.

Thanks to Shannon Warawa of KWB Chartered Accountants for providing this content.

Shannon Warawa, CPA, CA

Manager

Shannon completed her Bachelor of Commerce from the University of Alberta in 1999. She articled with PricewaterhouseCoopers and Howard Kirkpatrick Associates and obtained her CA designation in January 2004.

Since joining KWB in September 2005, her role has evolved from preparer to manager and mentor. She takes pride in sharing her knowledge with junior members of the KWB team and watching their confidence grow as they gain experience.

Shannon is a member of the KWB Manager Team. She is also the first point of contact for the majority of clients handling the affairs of a deceased parent or spouse.

Shannon is married to her high school sweetheart. After 30 years they still make each other laugh. She has 3 children – an angelic daughter and 2 spirited sons. She loves spending time with family and hosting holiday and birthday gatherings.

Shannon has volunteered for the Heart and Stroke Foundation and served as Parent Council Treasurer for many years at her children’s elementary school as well as team treasurer for her sons’ hockey and lacrosse teams.
Away from work, Shannon enjoys summer camping trips to B.C. where her and her family like checking out local farmers’ markets, playing cards on the beach, and hiking to nearby waterfalls. She also enjoys reading and book club, cheering at her children’s sports games, and her weekly boot camp classes.

Shannon's Contact Information

Other Posts by Shannon

Jan 14 2020
5 Things to Consider When Filing Your Tax Return

Here’s a list of some things to avoid when filing your tax return. Follow these tips; they could save you time and money! Filing an income tax and benefit return even if you have no income If you have no income to report, you should still file a return. You may be eligible for

Mar 21 2017
CRA Fraud Protection

Canada Revenue Agency and police again warned taxpayers of randomly targeted fraudulent telephone calls and e-mails that are being sent out as CRA fraud.  These phone calls and e-mails are not from the CRA. Annually the number of CRA fraud scams rise near the April 30th tax deadline. The phone call scams are imposters trying

May 4 2020
CPP Death Benefit and Survivor Payment

CPP death benefit The CPP death benefit is a one-time, lump-sum payment to the estate of the deceased contributor. The CPP death benefit can be paid to: The Estate of the deceased person The person who paid the funeral expenses A surviving spouse or common law partner A next of kin. The Executor is the first

Mar 19 2019
Applying for a trust account number or asking for a clearance certificate

Asking for a clearance certificate A clearance certificate certifies that all amounts for which a deceased taxpayer is liable to Canada Revenue Agency for have been paid.  If a clearance certificate is not obtained upon a taxpayer’s death, as the legal representative, you can be liable for any amount the deceased owes.  A

Apr 26 2016
Estate Planning Gifting Strategy

An estate planning gifting strategy is basically when you start to give away some of your assets prior to death in order to optimize taxes within the family. Usually, an estate planning gifting strategy refers to how we will distribute our assets when we die.  But you might be overlooking significant tax savings by not

Aug 30 2016
Graduated Rate Estates – New Rules for 2016

Starting for 2016 taxation years, inter vivos trusts, trusts created by will and certain estates will be subject to the top taxation rate. There are two exceptions to this change: graduated rate estates and qualified disability trusts. Graduated tax rates will still apply to these types of estates and trusts. Income earned and retained in

Nov 15 2016
Top 4 Financial Tips for the New Parent

Here are our top 4 financial tips for the new parent: Apply for a Social Insurance Number (SIN) for your child: It’s a good idea for you to apply for a Social Insurance Number for your child as soon as they are born. This way, you will not be left scrambling to obtain one when your

Mar 28 2017
EI, OAS and CPP Rulings

Employment and Social Development Canada (“ESDC”) is responsible for EI, OAS and CPP rulings, not Canada Revenue Agency. On April 1, 2013, the Social Security Tribunal (“SST”), an independent administrative tribunal operating at arm’s length from ESDC, was introduced to review appeals on EI, OAS and CPP rulings made by the ESDC. The process to

Feb 12 2019
Direct Beneficiary Designation - RRSP or RRIF

If you are considering a direct beneficiary designation for either a Registered Retirement Savings Plan (RRSP) or a Registered Retirement Income Fund (RRIF), you should be aware of some negative consequences that can occur. A direct beneficiary designation can result in unintended tax consequences to the estate, the inequitable treatment of heirs or the distribution

Jan 16 2018
Advance Income Tax Rulings

Advance Income Tax Rulings are written statements providing assurance on the income tax treatment of a specific proposed transaction or transactions that you might be contemplating. Subject to any disclaimer or qualification stated in the ruling, the ruling is considered binding with respect to the specific taxpayer making the request and the specific proposed transaction

Sep 24 2019
Receipt Bank (now Dext)

If you would like to spend less time organizing your records and more time growing your business, you should automate your document retention with Receipt Bank (now Dext). Receipt Bank (now Dext) is a website application that extracts key information from your invoices and receipts and publishes it directly into Quickbooks Online (QBO). Integrates with