Tax advice
T1135 Foreign Income Verification Statement
1. What is Form T1135?
Form T1135 – Foreign Income Verification Statement is an information return required by the Canada Revenue Agency (CRA).
You must file it if:
✔ You are a resident of Canada
✔ You hold specified foreign property
✔ The total cost of these properties exceeds CAD $100,000 at any time during the year
Important:
The $100,000 threshold is based on the cost amount (adjusted cost base), not the current fair market value.
2. What property must be included?
Generally included:
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Shares or securities of foreign corporations
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U.S. ETFs (e.g., VTI, QQQ, etc.) held in a non-registered account
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Bank accounts located outside Canada
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Rental real estate outside Canada
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Interests in non-resident corporations
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Interests in non-resident trusts
Generally excluded:
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RRSP
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RRIF
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TFSA
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RESP
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Personal-use property (e.g., a vacation home used only personally)
If you are unsure, it is safer to include the property or seek advice.
3. How to determine if you exceed $100,000
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Add up the acquisition cost of all your foreign property.
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Convert amounts to Canadian dollars using the exchange rate on the purchase date.
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If the total exceeds CAD $100,000 at any time during the year → T1135 is required.
If securities were purchased at different times, use the adjusted cost base (ACB) method.
4. Choose the reporting method
Form T1135 offers two reporting methods:
Simplified Reporting Method
(If total cost is between CAD $100,000 and $250,000)
You must report:
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Type of property
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Country
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Total income generated
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Total gain or loss
You do not need to list each individual asset separately.
Detailed Reporting Method
(If total cost exceeds CAD $250,000)
You must provide for each category:
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Description of the property
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Country
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Maximum cost during the year
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Cost at year-end
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Income generated
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Gain or loss on disposition
5. What income must be reported?
T1135 is an information return, not a tax calculation form.
However, income from foreign property must also be reported in your T1 income tax return, including:
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Interest
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Dividends
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Rental income
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Realized capital gains
6. Common situations
U.S. brokerage account
Even if your broker is located in the United States, what matters is where the property itself is situated.
Example:
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U.S. shares held in a non-registered account → generally reportable.
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Canadian shares held with a U.S. broker → requires analysis based on the specific facts.
7. Penalties for failure to file
If you fail to file T1135:
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$25 per day late
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Minimum penalty: $100
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Maximum penalty: $2,500
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Significantly higher penalties in cases of gross negligence
The CRA may also extend the reassessment period if T1135 was not filed.
8. New Quebec requirement (starting in 2025)
If you are a Quebec resident and hold more than CAD $100,000 in foreign property, you must also file:
Form TP-1079.8.BE / TP-1079.8.BE-V (Revenu Québec)
This requirement is in addition to the federal T1135 filing.
9. Common mistakes to avoid
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Confusing fair market value with acquisition cost
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Forgetting a foreign bank account
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Forgetting foreign rental property
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Assuming that no income means no filing requirement
The threshold is based on total cost, even if no income was generated.
10. Simple example
You hold:
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USD $80,000 in U.S. ETFs
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USD $30,000 in a U.S. bank account
Even if the current value is under CAD $100,000,
if the converted acquisition cost exceeded CAD $100,000 → you must file T1135.
Conclusion
If you hold property outside Canada, take the time to verify your total cost.
When in doubt, it is safer to file the form rather than risk penalties.
Without Prejudice.