September 25, 2019

Have foreign property? The CRA issues harsh penalties if you don’t file this form

If you own foreign property, in most cases, you will need to fill out the Foreign Income Verification Statement Form (T1135) if the value of the property exceeds $100,000 (at any point during the tax year in question). If you do not do so, the CRA may issue harsh penalties. Failure-to-file charges are $25 for each day the form is late, up to a maximum of $2,500 per tax year, plus non-deductible arrears interest. The T1135 is not well-known. Nevertheless, there are numerous cases of otherwise diligent taxpayers getting hit with excessive fines for not filing it.

“When we think of foreign property, our minds may turn to that offshore Swiss bank account or, perhaps, a Florida rental property. But, believe it or not, a T1135 must be filed if you own foreign stocks, such as Apple Corp., Ford Motor Co. or Bank of America, in your Canadian, non-registered brokerage account.”

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