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 year 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 is a T1135 and who has to file it?

The T1135 is an information return, not a tax return. It reports what foreign property you hold and the income earned on it, but it does not calculate or assess tax. The tax on the foreign income is handled on your regular T1 return. The T1135 is a separate disclosure obligation that exists so the CRA can verify that the income from those foreign assets is actually being reported.

You have to file a T1135 if you are a “reporting entity” under ITA 233.3(1), which means you are a specified Canadian entity (a Canadian resident individual, corporation, or trust, with some exclusions) and the total cost amount of your specified foreign property exceeded $100,000 CAD at any time during the year while you were a Canadian resident. The test is cumulative across all your foreign property, not per asset. A US brokerage account with $60,000 and a UK bank account with $50,000 puts you over the line even though neither alone exceeds $100,000.

The exclusions from filing include registered retirement plans (RRSP, RRIF, RPP), mutual fund corporations and trusts (they file their own reporting), registered charities, and tax-exempt persons. 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 is 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. Two things about that test matter.

First, it reads on cost amount, not fair market value. ITA 233.3(1) uses “cost amount,” which the CRA confirms is “generally the adjusted cost base and not the fair market value.” If you bought US shares for $110,000 CAD and they dropped to $80,000, you still have a $110,000 cost amount and you still file the T1135. Conversely, if you bought shares for $90,000 and they tripled in value, your cost amount is $90,000 and you are under the threshold (the gain does not push you over).

Second, the test is “at any time” during the year. You do not need to hold $100,000 on December 31. If your US brokerage account crossed $100,000 in March, even if you withdrew money and brought it below $100,000 by April, you file the T1135 for the year. The peak matters, not the year-end balance.

For property denominated in a foreign currency, you convert to Canadian dollars using the exchange rate on the day you acquired the property (for cost amount) and at the relevant time for the “at any time” test. This means the CAD/USD exchange rate can push a US-dollar account over the threshold even if the USD balance has not changed, because the Canadian-dollar cost amount rises when the Canadian dollar weakens.

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), the filing-due date is June 15, and the T1135 follows the same date.

There is no separate extension for the T1135. If you file your T1 return late but before an assessment, the T1135 can go with it, but the penalty for late filing under ITA 162(7) starts running from the day after the filing-due date. Filing a T1 extension request does not extend the T1135 deadline (Canada does not have the same automatic extension system as the US; the filing-due date is fixed by the Act).

If you realized partway through the year that you crossed the threshold, you do not file mid-year. The T1135 is an annual return filed once for the entire taxation year.

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 the penalties apply for failing to provide the information, regardless of whether the foreign property generated income or whether you correctly reported that income on your T1.

Standard penalty under ITA 162(7): $25 per day the failure continues, with a minimum of $100 and a maximum of $2,500. This applies per return, per year. If you missed the T1135 for three consecutive years, the maximum standard penalty is $7,500 ($2,500 per year).

Gross negligence penalty under ITA 162(10): when the CRA determines you “knowingly or under circumstances amounting to gross negligence” failed to file, the penalty is $500 per month of non-compliance (up to 24 months), doubled if the CRA issued a demand to file and you still did not comply, minus the standard penalty already assessed. The maximum under this provision is $12,000 per year (or $24,000 with a demand), on top of the standard penalty net-off.

In practice, the CRA does not automatically assess gross negligence on every late T1135. 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, or where the non-filing was part of a pattern of non-disclosure.

If you are years late, there are two recovery routes. Filing the missed T1135s late and relying on the CRA’s discretion to reduce penalties, or applying to the Voluntary Disclosures Program, which can relieve some or all of the penalties if your application qualifies. The late-filing guide walks through both routes and the VDP rules as of October 2025.

What is the difference between Part A and Part B?

The T1135 form has two reporting levels, and which one you use depends on the peak cost amount during the year.

Part A (simplified reporting): available when the total cost amount of your specified foreign property was more than $100,000 but never exceeded $250,000 at any time during the year. Part A requires only the country where the property is held, the category (bank accounts, shares, real property, etc.), the income earned, and the gain or loss on disposition. You do not need to list individual properties. You can group all your US bank accounts into one line, all your US shares into one line, and so on.

Part B (detailed reporting): required when the total cost amount exceeded $250,000 at any time during the year. Part B requires each property listed individually with specific details: description of the property, country, maximum cost amount during the year, cost amount at year-end, income or loss, and gain or loss on disposition. This is substantially more work, particularly for brokerage accounts with many holdings.

You can elect to use Part B even if you qualify for Part A. Some filers prefer the detail because it creates a better record for future years (when the account may cross the $250,000 line). But you cannot use Part A if you exceeded $250,000 at any point.

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 US holdings count, the treatment of retirement accounts, and what to do if you are years late. If you are a US person (citizen or green card holder) living in Canada, you may also have US-side reporting obligations (FBAR and Form 8938) 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.