Foreign reporting: Does it apply to you?

Understanding the T1135 Foreign Income Verification Statement (T1135) is essential for Canadian tax residents who own foreign property. It’s not a tax slip from your broker, but rather a crucial tax form that must be filed if applicable as part of your annual personal tax obligations.

In the article, we'll clarify the purpose of the T1135, when you need to file it, what types of property you must report, and other important information. While this guide is mainly for individual investors living in Canada, it's worth noting that the form is also relevant to corporations, partnerships, and trusts.

What is a T1135?

The T1135 is a form used to identify foreign property owned by Canadian tax residents. It’s designed to report information, not to calculate taxable income.
 

When do you need to file?

You are required to file a T1135 if you own foreign property with a cost exceeding $100,000 at any point during the taxation year.¹ Individuals are not required to file for the year in which they become a resident of Canada.
 

What type of property has to be reported?

You need to report specified foreign property, including:

• funds, tangible (land and buildings) or intangible property (patents, copyrights, etc.) situated, deposited, or held outside Canada
• shares of foreign corporations, even if held in Canadian investment accounts
• share of a Canadian corporation held in an account outside Canada
• an interest in a non-resident trust that was acquired for consideration (ex. foreign mutual funds and exchange traded funds listed on a U.S. exchange)
• an interest in a partnership that holds a specified foreign property unless the partnership is required to file Form T1135
• a property that is convertible into, exchangeable for, or confers a right to acquire a property that is specified foreign property
• a debt owed by a non-resident, including government and corporate bonds, debentures, mortgages, and notes receivable
• an interest in a foreign insurance policy
• precious metals, gold certificates, and futures contracts held outside Canada

Specified foreign property does not include:

• foreign property held in registered accounts (i.e. RRSPs, RESPs, RRIFS, FHSAs, TFSAs)
• a property used or held exclusively in carrying on an active business
• a share of the capital stock or indebtedness of a foreign affiliate
• units of Canadian mutual fund trusts or mutual fund corporations that invest in foreign securities or are held in a foreign currency
• a personal-use property (i.e. vacation homes, vehicles, jewelry, artwork, etc.)
• an interest in, or a right to acquire, any of the above-noted excluded foreign property

When is the form due?

The T1135 form is due with your regular tax filings:

• For self-employed individuals and their spouses or common-law partners, the deadline is June 15th.
• For all other individuals, the deadline is April 30th.

What happens if I don’t file?

Failing to file a T1135 by the due date incurs a penalty of $25 per day, ranging from a minimum of $100 to a maximum of $2,500. Additional penalties may be imposed if non-filing was intentional or due to gross negligence.

The CRA generally has three years from the date of the original assessment to reassess your tax return, which can extend by another three years if you’re reassessed for failing to file a T1135. If you haven’t met your filing obligations, consider the Voluntary Disclosure Program to potentially reduce penalties.
 

What information has to be reported?

There are two reporting methods, depending on your total asset cost.

Simplified Reporting Method

If you own specified foreign property with a total cost of more than $100,000 but less than $250,000 at any time during the year, you can use the simplified reporting method. If you prefer, you can use the detailed reporting method instead.

The information required includes:

• Checking a box for each category of specified foreign property you held. The seven categories are:
  1. Funds held outside of Canada
  2. Shares of non-resident corporations (other than foreign affiliates)
  3. Indebtedness owed by non-resident
  4. Interests in non-resident trusts
  5. Real property outside of Canada (other than personal use and real estate used in an active business)
  6. Other property outside of Canada
  7. Property held in an account with a Canadian registered securities dealer or a Canadian trust company
• Reporting the top-three country codes,² based on the maximum cost amount of specified foreign property held during the year ³
• Reporting the income from all specified foreign property
• Reporting the gains (losses) from the disposition of all specified foreign property

Detailed Reporting Method

If you own specified foreign property with a total cost of $250,000 or more at any time in the year, you will need to use the detailed reporting method. The detailed reporting form is divided into the seven categories mentioned above.

For each of the categories, you will need to report:

• the name of the foreign entity holding the property, name of corporation issuing shares, description of debt/ property, name of foreign trust or name of registered security dealer/ Canadian trust company⁴
• the country code for each property
• for category 7, the maximum fair market value (FMV) during the year for each country reported⁵
• the maximum cost amount of the property during the year⁶
• the cost amount at year-end
• the amount of any income/loss that the particular specified foreign property generated in the year
• the amount of any capital gain/loss realized during the year for each foreign property held at any time during the year

Foreign currency reporting

All amounts should be recorded in Canadian dollars. To convert amounts from a foreign currency, you should use the exchange rate in effect at the time of the transaction (i.e., when income received, or when property was purchased or sold). If you receive income throughout the year, it is acceptable to use the average exchange rate for the year. For the maximum FMV, you can use either the average exchange rate or the exchange rate in effect at the time of a transaction. For FMV at year-end, you should use the exchange rate at the end of the year.
 

Key Takeaways

The T1135 reporting requirements might apply to you without your full awareness. If you own foreign property or investments exceeding a $100,000 cost, including foreign real estate, you may need to file a T1135. Brokers may but are not required to provide foreign asset statements that provide T1135 information. Speak to your professional advisors if you think this may apply to you.

¹ All dollar amounts in this article are Canadian dollars.

² Where the specified property or where the issuers of the property are located determines the country codes.

³ The month-end cost amount of all specified foreign property should be aggregated on a country-by-country basis. From those amounts, you can then choose the top-three countries based on the highest month-end cost amount.

⁴ For category 7, you do not need to provide detailed information on every single specified foreign property held at an institution and may report the aggregate amount you hold with a particular institution or in each account at a particular institution on a country-by-country basis. You will have to report information for each country in which you held securities during the year, whether or not securities in that country are held at the end of the month or year.

⁵ This may be based on the maximum month-end fair market value for each country.

⁶ The cost amount is the acquisition cost of the property. You can use the month-end highest cost to determine the maximum cost amount during the year.

Fidelity Private Wealth is a brand name for a business group within Fidelity Investments Canada ULC (FIC) providing private wealth management products and services. Not all services are offered by FIC. Custodial services are offered through Fidelity Canada Clearing ULC, an affiliate of FIC. For discretionary management services offered by Fidelity Private Wealth, FIC acts in its capacity as a portfolio manager.

The statements contained herein are based on information believed to be reliable and are provided for information purposes only. Where such information is based in whole or in part on information provided by third parties, we cannot guarantee that it is accurate, complete or current at all times. It does not provide investment, tax or legal advice, and is not an offer or solicitation to buy. Graphs and charts are used for illustrative purposes only and do not reflect future values or returns on investment of any fund or portfolio. Particular investment strategies should be evaluated according to an investor’s investment objectives and tolerance for risk. Fidelity Investments Canada ULC and its affiliates and related entities are not liable for any errors or omissions in the information or for any loss or damage suffered.

© 2025 Fidelity Investments Canada ULC. All rights reserved. Fidelity Investments is a registered trademark of Fidelity Investments Canada ULC. Third-party trademarks are the property of their respective owners. Used with permission.