Form T1135 Foreign Income Verification Statement must be filed by any Canadian resident who, at any time during the year, owned specified foreign property with a total cost in excess of $100,000.
Form T1135 must also be filed by corporations and trusts resident in Canada and partnerships whose non-resident members’ share of income or loss is less than 90% during the reporting period.
New immigrants are not required to file Form T1135 for the first year they become a Canadian tax resident. But they must file Form T1135 for all subsequent taxation years. The form must be filed for the year of departure from Canada if an individual becomes a non-resident for income tax purpose.
What property has to be reported on Form T1135?
The property that has to reported on Form T1135 is called specified foreign property. The definition of specified foreign property is quite broad. It includes most non-Canadian investment properties. The following are examples of specified foreign property:
- cash in foreign bank accounts;
- shares in foreign companies;
- interests in non-resident trusts;
- interests or units in foreign mutual funds;
- debt owed by non-residents, foreign governments or foreign corporations;
- real estate situated outside Canada; and
- other income-earning foreign property.
Specified foreign property does not include:
- personal-used property (such as vacation property, a vehicle, jewellery, artwork, or any other such property);
- property used or held exclusively in the course of carrying on an active business (such as inventory or the equipment and building used in a business).