Form T1135 is an information return, not a separate tax. Canadian residents still report foreign income whether or not the form is required. The key test is generally the total cost amount of specified foreign property, not market value and not the amount of foreign income earned.
Apply the cost-amount threshold
Canadian resident individuals, corporations, and certain trusts generally file when the total cost amount of specified foreign property exceeds C$100,000 at any time in the year. Certain partnerships can also have a filing requirement. Track additions, disposals, reorganizations, and foreign-currency cost throughout the year rather than checking only December 31.
Identify specified foreign property
- Funds held outside Canada
- Shares of non-resident corporations, including many held through brokers
- Interests in certain non-resident trusts
- Foreign real estate held as an investment
- Certain debts owed by non-residents
- Interests in partnerships that hold specified foreign property when an exception does not apply
- Other property situated, deposited, or held outside Canada
Separate excluded property
Personal-use property is generally excluded, as are some assets used or held exclusively in an active business and certain registered-plan interests. Classification depends on actual use and legal form. A vacation property used mainly personally can differ from a rental property, and a foreign-currency denomination does not by itself make an asset foreign property.
Choose the correct reporting method
The CRA uses a two-tier structure. Simplified Part A can generally apply when total cost was more than C$100,000 but less than C$250,000 throughout the year. Detailed Part B can be required when the cost reaches C$250,000 or more at any time. Confirm the current form instructions for the year filed.
Reconcile income and dispositions
T1135 information should reconcile to foreign interest, dividends, rental income, trust distributions, and capital gains reported on the return. The CRA notes that foreign income remains reportable even when the C$100,000 information-return threshold is not exceeded.
Address missed filings carefully
A late or inaccurate T1135 can affect penalties and the reassessment period. Review every affected year, foreign-income reporting, and the CRA's current correction or Voluntary Disclosures Program rules before submitting an incomplete fix.
Frequently asked questions
Is the T1135 threshold based on market value?+
Generally no. The threshold is based on cost amount, which can differ significantly from current market value.
Do I report foreign income below the C$100,000 threshold?+
Yes. The CRA states that foreign-property income is reportable even when Form T1135 is not required.
Official sources
Use the government pages below to verify current instructions and requirements.
CRA: Foreign Income Verification Statement ↗CRA: Questions and answers about Form T1135 ↗Bring the notice, return, or records to a focused consultation.
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