Budget 2013 - Foreign Income Verification Statement (Form T1135)

What’s new

As of February 9, 2015, individual taxpayers can file this form electronically for the 2014 tax year. Corporations, trusts and partnerships must still paper file for 2014. The CRA will make electronic filing of Form T1135 available for corporations and partnerships in the future and will announce when the service becomes available.

For years prior to 2014, all taxpayers must paper file the T1135.

Please see "How is Form T1135 filed with the CRA?" for instructions on how to paper file.

Notice to the reader

The legislative measure below has received Royal Assent.

However, Budget 2015 proposes changes to the reporting requirements for specified foreign property.

The budget proposes to extend the reassessment period for a taxation year of a taxpayer by three years if the taxpayer has failed to report income from a foreign property on their income tax return and Form T1135 was not filed, late-filed or included incorrect information concerning the foreign property. The budget also confirms the CRA's plans to strengthen the statement to collect more detailed information concerning each foreign property.

When is a taxpayer required to file Form T1135?

Individuals, corporations, trusts, and certain partnerships, that, at any time during a year, own specified foreign investment property costing more than $100,000 must file a Form T1135 by the filing due-date of their income return . This applies even if the taxpayer has no tax payable during the year. Refer to Foreign Income Verification Statement for further information on the T1135 and what is considered specified foreign property.

What is the normal reassessment period?

Generally, the CRA is prevented from processing a reassessment for additional tax after the normal reassessment period, which is three years after the day a notice of an original assessment is sent to a taxpayer (four years for mutual fund trust or a corporation that is not a Canadian-controlled private corporation).

How is the reassessment period changing related to taxpayers who must file Form T1135?

For the 2013 and subsequent taxation years, the budget proposes to extend the reassessment period for a taxation year of a taxpayer by three years if

  • the taxpayer has failed to report income from a specified foreign property on their income tax return; and
  • the Form T1135 was not filed on time by the taxpayer, or a specified foreign property was not identified, or was improperly identified, on the Form T1135.

This extended reassessment period will not apply if income associated with each specified foreign property of a taxpayer has been correctly reported or the Form T1135 is filed accurately and on time.

What revisions are being made to Form T1135?

Starting with the 2013 taxation year, the form will be revised to clarify the filing requirements and include more detailed information requirements for each specified foreign property, including:

  • the name of the specific foreign institution or other entity holding funds outside of Canada;
  • the specific country to which the property relates; and
  • the income generated from the property.

These revisions will strengthen the usefulness of Form T1135 in determining whether taxpayers are correctly reporting foreign income.

What changes are being made to improve the filing process for Form T1135?

For taxpayers who have ticked the “Yes” box on their tax returns indicating they have specified foreign property in a taxation year with a total cost of more than $100,000, a reminder will be included on their Notices of Assessment of the obligation to file Form T1135. These reminders will start with the 2013 taxation year.

How is Form T1135 filed with the CRA?

Individual taxpayers have the choice to either paper file or electronically file Form T1135 for their 2014 tax year. Corporations, trusts and partnerships must still file a paper copy of Form T1135.

Taxpayers should attach a copy of Form T1135 to their paper tax return (or information return in the case of a partnership) or mail the form separately to:

Ottawa Technology Centre
Data Assessment and Evaluations Program
Foreign Reporting Unit
875 Heron Road
Ottawa ON K1A 1A2

Where can I get more information about these changes?

The CRA is committed to providing taxpayers with up-to-date information. The CRA encourages taxpayers to check its Web pages often. All new forms, policies, and guidelines will be posted as they become available.

In the meantime, please see the Department of Finance Canada's Budget 2013 documents for details.

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