On the Personal Income Tax Return, why does it ask me if I own a foreign property with a cost of more than $100,000 CDN during the year?

As a Canadian resident, the CRA requires you to file a information form T1135. If you hold or have held a specified foreign property with a cost of more than $100,000 at any time during the tax year. Completing this form does not generate additional Canadian tax liability but failure to file the form in time could result in a significant penalty. The penalty is $25 for each day that the form is filed late.

The deadline is the same deadline as your Personal Income Tax Return although the form is mailed to a separate CRA office. Not all of your foreign properties qualify as specified foreign property. Some of the popular specified foreign properties are:

• Foreign (non Canadian bank account) bank account
• Trading account opened outside Canada
• Vacation house/cottage outside Canada

Please see a qualified tax advisor to determine whether you have to file this form.

ABOUT THE AUTHOR

ALLAN MADAN

CA.CPA.CGA

Allan Madan is a CPA, CA and the founder of Madan Chartered Accountant Professional Corporation. Allan provides valuable tax planning, accounting and income tax preparation services in the Greater Toronto Area.

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