CRA wants to know more about your foreign property
Now is a great time to start organizing your 2014 tax information. Refer to your ‘Go-To Tax Envelope for 2014’ 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 right here on our website. There have been some changes to the reporting requirements since the 2014 checklist was printed (on the Go-To Tax Envelope).
The T1135 is a form that is now required by CRA for reporting on foreign property. The form is meant to crack down on tax payers who are avoiding or under reporting 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 2014 tax materials.