Specified Foreign Property

Q: I've heard Canadian residents need to report income from all sources, including foreign ones. Is this true?

A:Yes, that's correct. Canadian residents are obligated to report their income from all sources, whether the income is generated inside or outside of Canada.

Q:Are there any exceptions to this rule?

A:Yes, there is an exception. Individuals who immigrated to Canada during the tax year are not required to answer the question about foreign property in the tax return for that year.

Q:Where can I find the question about foreign property on the tax return?

A:The question related to foreign property can be found in the "Foreign property" section located in Step 1, page 2 of the tax return.

Q:What should I do if my answer to the foreign property question is “Yes”?

A:If you answer "Yes" to having specified foreign property, you must complete the form T1135 - Foreign Income Verification Statement. This form must be filed with the Canada Revenue Agency (CRA) before the tax return's due date. This is mandatory even if you are not otherwise required to file a tax return for that year. Download T1135 here>>>

Q:What is the form T1135 used for?

A:The form T1135 - Foreign Income Verification Statement is used to provide more detailed information regarding a taxpayer's foreign property and income. It ensures that the CRA has comprehensive information about Canadian residents' foreign income to ensure proper taxation.

Q:What foreign property I don't need report?

A:If you have a property mainly for personal use, like a holiday home, you don't have to report it. But, if you rent it out for part of the year aiming to make a profit, you do. If you're just covering your own costs by renting, then you don't. Retirement accounts, like RRSPs, with foreign investments over $100,000 are exempt. So, you don't need to fill out the T1135 form for them.

Remember, it's always a good idea to consult with a tax professional if you have questions or uncertainties about your specific situation.