Foreign Income Reporting T1135: Tax Accountant
Canadians that have accumulated wealth in other parts of the world need to be aware of the Canadian reporting requirements. If you are a Canadian resident you are required to report foreign assets which have a cost value of over $100,000. On a personal income tax return you must answer “Did you own or hold foreign property at any time in the year with a total cost of more than $100,000 Canadian?” If the answer is yes to this question, then you would be required to file the T1135. Over the past few years the foreign reporting requirements have changed which are outlined on the newly redesigned T1135 (Foreign income Verification Statement) tax forms.
Where to disclose my foreign assets?
Canadian resident taxpayers are required to file T1135, with their T1 personal income tax return if at any time in the year the total foreign property they hold was more than $100,000 (Canadian). The CRA will impose hefty penalties if this form is not filed. For 2014, taxpayers can file form T1135 electronically, but corporations must still file a paper version of the form.
Examples of foreign property that needs to be disclosed?
Cash, stocks, bonds, land and buildings which are located outside Canada. Other foreign property that would be disclosed on the T1135:
- Funds held in foreign bank accounts
- Shares of foreign corporations, foreign mutual funds
- Foreign investments
- Interest in foreign insurance policy
For the full list refer to the T1135 form.
Examples of foreign property that does not needs to be disclosed?
You are not required to report personal properties such as art, jewelry, or vacation properties that you use primarily for personal use. Also you are not required to report a personal residence, or property exclusively related to your active business.
Penalties for not reporting foreign income?
The Canada Revenue Agency imposes hefty penalties for not reporting foreign assets over $100,000. The current penalty is $25 a day to a maximum of $2,500 per year. The foreign reporting requirement was implemented back in 1998. To avoid the penalties this reporting can be made through the Voluntary Disclosure Program (VDP).
Download Foreign Income Reporting T1135: Tax Accountant
Cheema CPA Professional Corporation – Chartered Professional Accountants is an accounting firm located in Brampton, Ontario. We can professionally prepare pare your personal income taxes and make sure that your foreign income is reported correctly on the T1135. We can help file the T1135 for past years and for over due returns. We can help reduce the penalties and interest by using the Voluntary Disclosure Program.