What Form T1135 asks
Form T1135 is the Canada Revenue Agency's Foreign Income Verification Statement. A Canadian resident files it for any year in which the total cost amount of their specified foreign property was more than C$100,000 at any time. It is a reporting form, not a tax. Income from foreign property goes on the tax return whether or not the total ever reaches that line.
An individual does not file it for the year they first become a resident of Canada.
What counts
- Shares of non-resident corporations, whether held through a Canadian or a foreign broker
- Money in bank accounts outside Canada
- Debt owed by non-residents, including bonds and notes
- Interests in non-resident trusts and non-resident mutual funds
- Real property outside Canada that is not mainly for personal use, such as a rental condo
- Shares of Canadian companies held by an agent outside Canada
- Foreign insurance policies, and precious metals or futures held outside Canada
What does not
- Holdings inside an RRSP or a TFSA
- Canadian mutual fund trusts and corporations, even when they hold foreign stocks
- Personal-use property, such as a vacation home used mainly by the owner
- Shares and debt of a foreign affiliate, which go on Form T1134
- Property used only in an active business
- A Canadian company's shares just because they trade in US dollars. Currency does not decide it.
Cost, not market value
The test uses cost amount, which is generally the adjusted cost base. A position bought for C$60,000 and now worth C$150,000 still counts as C$60,000. Foreign purchases convert at the rate when they were bought, so later currency moves do not change the cost. Property received as a gift or inheritance, or owned on arrival in Canada, takes its fair market value at that time as its cost.
All property is added together. CRA's own example is shares costing C$75,000 plus a US bank account holding C$35,000: neither passes the line alone, but the C$110,000 total does.
"At any time" means any day of the year
The line applies at any time in the year, not just at year-end. If the total passed C$100,000 for part of the year, CRA says the form is due for that year even if everything was sold before December 31.
This calculator reads the total after every row, so a short peak shows up even when no month-end catches it. The built-in example does this on purpose: the total crosses C$100,000 for two weeks in March and sits below it at every month-end.
Part A or Part B
Above C$100,000 and under C$250,000 throughout the year, the form offers a choice between Part A, a simplified method with tick boxes, and Part B, the detailed tables. At C$250,000 or more at any time, Part B is the required method.
The month-end maximum
Part B asks for the maximum cost amount during the year. The form's instructions allow that figure to be based on the highest month-end cost, which is what the "highest month-end" column shows. Part A's country codes also rest on month-end cost, grouped by country.
Which exchange rate the form uses
| Amount | Rate in the instructions |
|---|---|
| Cost of property bought | The rate when it was purchased |
| Income received | The rate when received, or an average rate for the year if received throughout it |
| Maximum funds held in the year | The average rate for the year |
| Funds at year-end | The rate at the end of the year |
| Maximum fair market value in the year | The average rate for the year |
| Fair market value at year-end | The rate at the end of the year |
The Bank of Canada rate lookup gives the rate on a date, the average for a year and the last rate of a year. For a foreign bank account, one simple approach here is an Opening balance row with the highest balance and the average rate typed in. A single row cannot follow a balance that moves through the year.
Holdings at a Canadian broker
Property held with a Canadian registered securities dealer or a Canadian trust company may be reported in total, country by country, in Part B's Category 7. That category uses fair market value rather than cost: the maximum during the year, which may be the highest month-end value, and the value at year-end. The C$100,000 test itself stays on cost. Whether a broker qualifies is something the broker can confirm.
This calculator works on cost, so it does not produce Category 7 market values.
Due date and penalties
The form is due on the due date of the income tax return, even if no return is otherwise required. CRA lists these penalties:
| Situation | Penalty |
|---|---|
| Filed late | $25 a day for up to 100 days, minimum $100, maximum $2,500 |
| Not filed, knowingly or through gross negligence | $500 a month for up to 24 months, maximum $12,000, less penalties already charged |
| A formal demand to file is knowingly or grossly negligently ignored | $1,000 a month for up to 24 months, maximum $24,000, less penalties already charged |
| Still outstanding after 24 months | 5% of the cost of the foreign property, less penalties already charged |
| False statement or omission, knowingly or through gross negligence | The greater of $24,000 or 5% of the cost of the foreign property |
CRA can also take three more years to reassess when foreign income was left off the return and the form was missing, late or wrong. Taxpayer relief and the Voluntary Disclosures Program may be open to people correcting past years.
What this calculator does not do
- It does not decide whether a return is required. That turns on residency, what the property is and how it is held.
- It does not fill in the form, assign categories or country codes, or total income and gains by property.
- It does not check whether each holding is specified foreign property. Untick anything that is not.
- It has no Bank of Canada rates before 2017-01-03 for automatic fill. Type earlier rates, or enter the cost in CAD. The Bank keeps older noon and closing rates on its site.
- It does not handle a functional-currency election.
The same rows work in the ACB calculator. Save them as a CSV here and load the file there.