Form T1135: Who Files, What Counts, Deadlines, and Penalties

The T1135, formally titled the Foreign Income Verification Statement, is an information return that Canadian residents file when the total cost amount of their specified foreign property exceeds $100,000 CAD at any time during the year. It is filed under section 233.3 of the Income Tax Act. The form itself does not generate a tax bill (you report the income from those assets on your regular return), but missing it triggers penalties that start at $25 per day and can climb to $12,000 per return under the gross negligence provisions. The CRA takes the T1135 seriously because it is the primary tool for tracking foreign assets held by Canadian residents.

What’s a T1135 and who has to file it?

The T1135 is an information return, not a tax return. It discloses your foreign property and the income earned on it; the actual tax is calculated on your regular T1 return. You must file if you are a Canadian resident individual, corporation, or trust whose specified foreign property exceeded $100,000 CAD in total cost amount at any point during the year under ITA 233.3(1). The test is cumulative: a $60,000 US brokerage account and a $50,000 UK bank account put you over the line even though neither alone exceeds $100,000.

• Registered retirement plans (RRSP, RRIF, RPP), mutual fund corporations and trusts, registered charities, and tax-exempt persons are excluded from filing
• If you are a non-resident for the entire year, the T1135 does not apply (the requirement runs only while you are a Canadian resident)

What counts as specified foreign property?

The definition in ITA 233.3(1) is broad and covers most financial assets held outside Canada, including bank accounts, shares in foreign companies, foreign rental properties, and debts owed to you by non-residents. It also excludes several common categories, so not everything foreign triggers the form. The full list of what counts:

• Funds or intangible property situated, deposited, or held outside Canada (foreign bank accounts, foreign brokerage accounts, foreign cash balances)
• Shares of non-resident corporations (US stocks, UK equities, shares in a private foreign company), whether held through a broker or directly
• Interests in non-resident trusts (excluding certain exempt foreign trusts)
• Interests in non-resident partnerships
• Indebtedness owed by a non-resident person (a loan you made to someone outside Canada)
• Real property outside Canada, if it is held for investment or business purposes (rental properties, foreign commercial real estate, undeveloped land held for appreciation)
• Rights to acquire any of the above (options, warrants, convertible notes)

The exclusions are just as important. Specified foreign property does not include:

• Personal-use property (your vacation home that you do not rent out, personal effects stored abroad)
• Property used in an active business carried on by you (inventory, receivables, equipment, if the business is active and you operate it directly)
• Shares or indebtedness of a foreign affiliate (reported separately on Form T1134)
• An interest in a non-resident testamentary trust that has never been contributed to by you or a related person
• Property in a registered account (RRSP, RRIF, TFSA, RESP, RPP)

The most common properties that trigger the T1135 for Canadian residents are US brokerage accounts, US bank accounts, shares in US-listed companies held outside of registered accounts, and US or foreign rental properties. If you hold Canadian-listed ETFs that invest in foreign securities (for example, a TSX-listed S&P 500 ETF), those generally do not count because the ETF itself is a Canadian trust or corporation and you hold units of a Canadian entity. But if you hold the underlying US stocks directly in a US brokerage account, those do count.

What’s the $100,000 threshold?

The threshold is $100,000 CAD in total cost amount, measured at any point during the year while you were a Canadian resident. The test uses cost amount (generally the adjusted cost base under ITA 233.3(1)), not fair market value: shares bought for $110,000 CAD that dropped to $80,000 still carry a $110,000 cost amount and still trigger filing. The test also reads “at any time,” so crossing $100,000 in March means you file even if the balance drops below that by April.

• For property in a foreign currency, convert to CAD using the exchange rate on the date you acquired the property; a weakening Canadian dollar can push a US-dollar account over the threshold even if the USD balance has not changed
• The peak cost amount during the year matters, not the December 31 balance

When is the T1135 due?

The T1135 is due on your filing-due date for the year, per ITA 233.3(3). For most individuals, that is April 30 of the following year; for self-employed individuals and their spouses, June 15. There is no separate extension. The penalty under ITA 162(7) starts the day after the filing-due date, and a T1 extension request does not extend the T1135 deadline. If you crossed the threshold partway through the year, you still file once annually, not mid-year.

• Canada does not have the same automatic extension system as the US; the filing-due date is fixed by the Act
• The T1135 is an annual return for the entire taxation year, regardless of when the $100,000 cost threshold was first crossed

What are the penalties for filing late or not filing?

The penalty structure has two tiers, and neither requires that you owe additional tax. The T1135 is an information return, and penalties apply for failing to provide the information regardless of whether the foreign property generated income.

• Standard penalty under ITA 162(7): $25 per day, minimum $100, maximum $2,500 per return per year. Three missed years caps at $7,500.
• Gross negligence penalty under ITA 162(10): $500 per month (up to 24 months), doubled if CRA issued a demand, minus the standard penalty already assessed. Maximum $12,000 per return ($24,000 per return with a demand).

In practice, most late filings draw the standard $2,500 penalty. Gross negligence is reserved for cases where the CRA concludes you were aware of the obligation and chose not to comply. If you are years late, two recovery routes exist: filing late with a penalty-relief request, or applying to the Voluntary Disclosures Program. The late-filing guide walks through both routes.

What’s the difference between Part A and Part B?

The T1135 has two reporting levels based on the peak cost amount during the year. Part A (simplified) applies when cost is between $100,000 and $250,000; Part B (detailed) is required above $250,000. You can elect Part B even if you qualify for Part A, but not the reverse.

• Part A: report by country and category (bank accounts, shares, real property, etc.), plus income and gains. No individual property listing required.
• Part B: each property listed individually with description, country, maximum cost during the year, year-end cost, income or loss, and gain or loss on disposition. Substantially more work for brokerage accounts with many holdings.

How do I file a T1135?

Electronically through your tax software as part of your T1 filing, or by mailing a paper copy to the CRA. Most Canadian tax software (TurboTax, Wealthsimple Tax, StudioTax, Profile) includes the T1135 as a form within the return, and it transmits with the rest of your EFILE. If you use a CPA, they file it alongside your return. CRA’s My Account portal does not accept a standalone T1135 upload outside the normal filing process.

• If your return was already filed and you need to add a T1135, refile with it attached or mail the paper form to the Winnipeg Tax Centre (Ontario and western provinces) or Sudbury Tax Centre (Quebec and Atlantic provinces)
• Paper filers download the form from the CRA’s T1135 page

What should I do next?

If your foreign property is above $100,000 in cost amount, you file the T1135 with your return. If you hold US accounts, the T1135 for US accounts guide covers which holdings count and what to do if you are years late. US persons living in Canada may also have FBAR and Form 8938 obligations on the same accounts, creating overlapping disclosure requirements in both countries.

• T1135 for US accounts and late filing, the cross-border angle and VDP recovery
• FBAR vs Form 8938: do I file both?, the US-side reporting that often runs alongside the T1135
• Am I still a Canadian tax resident?, whether you have a T1135 obligation at all
• Canada’s departure tax, what happens to your foreign property when you leave Canada
• I’m American and moving to Canada, where the T1135 obligation starts for Americans arriving in Canada

This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.