Year-end is a great time to start organizing your tax information. Refer to your Fraser & Partners ‘Go-To Tax Envelope with the general income tax checklist on the front that identifies paperwork you’ll need to gather for submitting your taxes. Or, click here to visit the income tax checklist on our website.
The T1135 is a form that is required by CRA for reporting on foreign property. The form is meant to crack down on taxpayers who are avoiding or underreporting their offshore income. It is a supplement to the T3 (Statement of Trust Income Allocations and Designations) and T5 (Statement of Investment Income) slips.
Are you required to submit a T1135?
The form applies to Canadians who own foreign property with a total cost amount of more than $100,000 at any time in a given year including:
- foreign bank accounts, shares of foreign companies other than foreign affiliates, shares of Canadian corporations held outside Canada;
- debts owed by non-residents (including government and corporate bonds), debentures, mortgages, and notes receivable;
- interests in certain non-resident trusts;
- interests or units in offshore investment funds; if you have Canadian mutual or segregated funds investing outside of Canada on your behalf, in most cases the tax reporting is done by the investment firm;
- real estate situated outside Canada, other than personal-use property or property used in business; rental property needs to be reported;
- and other tangible and intangible property such as patents and copyrights situated or deposited outside Canada.
What information is collected on the T1135?
- Names of specific foreign (financial services) institutions
- Countries where offshore assets are located
- Foreign income earned on those assets
- Maximum cost amount of those assets during the year
- Month-end values of your holdings for tax reporting
Don’t forget to include this information when you package your tax materials.