Overview

If you’re a Canadian tax resident and, at any time in the year, the total cost amount of your specified foreign property exceeds $100,000 CAD, the Canada Revenue Agency (CRA) generally requires an information return: Form T1135 (Foreign Income Verification Statement).

Key takeaways The $100,000 threshold is based on cost amount (not fair market value) and applies if you exceed it at any time in the year.This is an information filing, not a separate tax—but penalties can apply if you miss it.The requirement can apply to individuals and corporations (and certain trusts).T1135 (foreign property) is different from T1134 (foreign affiliates). You may need to file both.

Why CRA asks

Canada generally taxes residents on worldwide income. Foreign investments can be harder for CRA to verify through standard Canadian information slips (for example, T3/T5). The T1135 disclosure helps CRA identify potential unreported foreign income or gains and better target compliance reviews.

Filing T1135 does not automatically mean you owe additional taxes—it is primarily a disclosure and verification requirement.

What is “specified foreign property”?

“Specified foreign property” is a defined term in the Income Tax Act. In plain English, it generally includes foreign investment-type property and certain foreign-held assets that CRA wants disclosed when your total cost exceeds the threshold.

Common examples include:

• Funds held outside Canada (foreign bank/brokerage accounts)
• Shares of non-resident corporations (foreign stocks and many foreign ETFs)
• Indebtedness owed by non-residents (bonds/notes/loans to non-residents)
• Interests in non-resident trusts
• Real property outside Canada (for example, a foreign rental property)

The $100,000 test is based on cost amount (generally what you paid, adjusted under tax rules), not fair market value.

Also, the test is “at any time in the year”—you do not need to be over $100,000 on December 31 to have a filing obligation.

Common exclusions

Some items that often do not need to be reported on T1135 include:

• Property held for personal use (for example, a personal-use vacation property outside Canada, where the facts support that it is truly personal-use)
• Specified foreign property held inside registered plans (for example, RRSP/TFSA/RRIF), which is generally excluded from T1135 reporting

Important: Even if T1135 is not required, foreign income may still be taxable and must be reported on your Canadian tax return.

This applies to individuals and corporations

This reporting is not just for individuals. Form T1135 can apply to Canadian-resident individuals, corporations, and certain trusts if the threshold is met.

Filing methods: simplified vs detailed

T1135 has two tiers:

• Simplified method: if your total cost is over $100,000 but under $250,000 throughout the year.
• Detailed method: if you hit $250,000 or more at any time in the year.

CRA groups specified foreign property into seven categories:

1. Funds held outside Canada

2. Shares of non-resident corporations

3. Indebtedness owed by non-residents

4. Interests in non-resident trusts

5. Real property outside Canada

6. Other property outside Canada

7. Property held in an account with a Canadian registered securities dealer or a Canadian trust company

For the simplified method you only choose the category of the foreign specified assets held during the year.

Under the detailed method, you need to provide the details of each seven categories on a property-by-property basis.

T1135 is not the same as T1134

If you own a significant interest in a non-resident corporation (equal or more than 1% equity interest in a non-resident corporation, where the combined interest of the taxpayer and related persons is equal or more than 10%), you may have a separate filing requirement to file form T1134 (Information Return Relating to Controlled and Not-Controlled Foreign Affiliates).

Bottom line: T1135 reports specified foreign property holdings. T1134 reports foreign affiliates. Some taxpayers may need to file both.

Topic	T1135	T1134
What it is	Foreign property disclosure	Foreign affiliate information return
Typical trigger	Cost of specified foreign property > $100,000	Ownership in a foreign affiliate (often discussed around ~10%+; facts/rules apply)
Who files	Individuals / corporations / certain trusts	Individuals / corporations / certain trusts with foreign affiliates
Purpose	Visibility into foreign assets & related income	Detailed reporting on foreign affiliates

Newcomers to Canada: first-year exemption

Individuals are generally not required to file T1135 for the tax year in which they first become resident in Canada.

The documentation of the specified foreign properties still matters. When you become a Canadian tax resident, it is smart to document the fair market value (FMV) of foreign assets on that date. This helps support your Canadian tax starting point (baseline). Generally, Canada taxes you on future growth after residency, so the increase in value after your residency date is what becomes relevant when you dispose of the property.

Practical takeaway: Keep records that support FMV on the date you became a Canadian tax resident (statements, appraisals where needed, and a consistent FX conversion approach).

Common T1135 filing triggers

• You left properties in your home country when you immigrated to Canada.
• You keep USD cash or investments in a US brokerage.
• You hold crypto assets outside Canada.
• You bought US-listed ETFs (especially if held outside registered accounts).

Compliance guide

• Track cost of your foreign specified properties in CAD. Note that the $100,000 threshold is for the total assets not for an individual asset or category.
• Keep statements and transaction history for each property/category.
• Do an annual threshold check before your filing deadline.
• Don’t simply presume “my bank or broker already reports it.” T1135 filing is taxpayer’s responsibility.

Filing deadline and penalties

T1135 filing deadline is the same as your personal tax filing; April 30 for employees and June 15 for you or your spouse/common-law partner are self-employed.

T1135 is an information form, but CRA can assess penalties for late filing or non-filing. If you’re near the thresholds or have multiple foreign accounts, it’s worth doing a quick annual T1135 check before you file.

CRA has specific penalty provisions for failing to file foreign reporting forms like T1135:

• Basic late-filing penalty: $25/day up to 100 days (min $100, max $2,500)
• If CRA views the failure as knowing or gross negligence: $500/month up to 24 months (max $12,000, net of some penalties)

FAQ

Is T1135 a tax filing?

No. It’s an information return that can be filed separate from your tax filing. Penalties can apply even if no additional tax is owing.

Is the $100,000 based on market value?

No. It is generally based on cost amount, not market value.

If I sold everything mid-year, do I still file?

If you were over the threshold at any time in the year, you may still have a filing requirement for that year.

Need Help?

Need help confirming whether you must file T1135 (or T1134)? If you hold foreign investments, foreign rental property, or you’re a newcomer with assets outside Canada, we can confirm your filing requirements and help you stay compliant.

Contact Finsight CPA Inc. to book a quick consultation.