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T1135 Foreign Asset Reporting: The Complete Guide

Llandora·Updated 2026-10-14
⚠️ Disclaimer: For general information only — not tax, financial, legal, or medical advice. Figures may be outdated or incorrect; tax rules change frequently. Verify important decisions with the CRA/IRS or a qualified professional (for health topics, a licensed healthcare provider). You use this information at your own risk.
The short answer

Form T1135, the Foreign Income Verification Statement, is the form that surprises Canadian taxpayers the most. It is not a tax — it is a disclosure. If your foreign property crossed CAD $100,000 in cost at any point in the year, you must tell the CRA about it, even if it earned nothing. This guide covers who must file, what counts, how to file, and what happens if you don't.

Who must file

You must file Form T1135 if you are a Canadian tax resident — an individual, corporation, or certain trusts — and at any time during the year you owned specified foreign property with a total cost amount exceeding $100,000. Three details matter enormously:

  • Cost amount, not market value. The threshold uses what you paid (adjusted cost base), not what the property is worth today. A stock portfolio that cost $90,000 but is now worth $150,000 does not trigger filing on its own.
  • At any time in the year. If you briefly held $120,000 of foreign property in March and sold it in April, you still must file for that year.
  • The total across everything. You add up all specified foreign property. Three accounts of $40,000 each means $120,000 — you file.

What counts as specified foreign property

Specified foreign property is broadly defined. It includes:

  • Funds in foreign bank accounts
  • Shares of foreign corporations (including US stocks)
  • Foreign mutual funds and ETFs
  • Debt owed by non-residents (foreign bonds)
  • Interests in foreign trusts
  • Foreign rental or investment real estate (not personal-use property)
  • Precious metals held abroad, foreign insurance policies

What does not count:

  • Property held in registered accounts: RRSPs, RRIFs, TFSAs, registered pension plans — including a US 401(k)
  • Personal-use property (your vacation home you actually use)
  • Property used exclusively in an active business

A common trap: a Canadian holding US stocks inside an RRSP does not count those toward the threshold, but the same stocks in a non-registered account do.

Simplified vs detailed reporting

Since 2015, the CRA has offered two tiers:

  • $100,000 to $250,000 total cost: you may use the simplified method — aggregate reporting where you check boxes for the types of property held and list the top three countries where the property is located. No per-property detail needed.
  • Above $250,000 total cost: detailed reporting is required — each property reported with its country, maximum cost during the year, year-end cost, and income or loss generated.

Choose the method that matches your total; using the detailed method when you qualify for simplified is allowed but unnecessary work.

How and when to file

Form T1135 is filed with your income tax return, by the same deadline:

  • Individuals: April 30 (June 15 if you or your spouse are self-employed, but any balance owing is still due April 30)
  • The form can be filed electronically with most tax software or through CRA's NETFILE; paper filers attach it to the return

You must file T1135 even if you are not otherwise required to file a tax return — the obligation stands on its own. And if you ticked "yes" to owning foreign property over $100,000 on your T1, expect the CRA's notice of assessment to remind you about the T1135.

Penalties: the part everyone underestimates

The penalty structure is deliberately steep:

  • Late filing: $25 per day, minimum $100, maximum $2,500 (up to 100 days late)
  • Knowing or grossly negligent failure to file: $500 per month, up to 24 months — maximum $12,000
  • Failure to comply after a CRA demand: $1,000 per month, up to 24 months — maximum $24,000
  • False statement or omission: the greater of $24,000 or 5% of the cost amount of the property involved
  • After 24 months of gross-negligent non-filing, an additional penalty of 5% of the property's cost can apply

Beyond money: if you failed to report income from specified foreign property and did not file T1135 on time (or filed it with a false statement), the CRA's normal reassessment period is extended by three years. That is three extra years the CRA can come back and reassess you.

Cryptocurrency and the T1135

Cryptoassets held on foreign exchanges or in foreign wallets can be specified foreign property if their cost exceeds the threshold along with your other foreign property. The CRA has specifically flagged crypto as an area of T1135 attention. Track your cost amounts; "I didn't know the value" is not a defence.

Frequently asked questions

I inherited foreign property this year. Does it count?

Yes — inherited property counts at its cost amount to you (generally the fair market value at the time of inheritance). If the total pushes you over $100,000, you file.

My spouse and I own a joint foreign account. Who reports?

Each owner reports based on their share. If a $160,000 joint account is owned 50/50, each spouse has $80,000 — but combined with any other foreign property each owns, either or both may cross the threshold individually.

I sold everything before year-end. Do I still file?

Yes. The test is "at any time during the year." Selling before December 31 does not erase the obligation for that year.

Does a foreign pension count?

Interests in foreign pension plans are generally excluded from specified foreign property. But the exclusion is technical — if you are unsure whether your specific plan qualifies, check the CRA guidance or ask a professional rather than guessing.

What if I genuinely didn't know about the T1135?

Ignorance is not a defence against the late-filing penalty, but the CRA's voluntary disclosures program may reduce penalties if you come forward before the CRA contacts you. Talk to a tax professional promptly — waiting only increases the daily penalty.

Sources

  • Canada Revenue Agency, Foreign Income Verification Statement (Form T1135): https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/foreign-reporting/foreign-income-verification-statement.html
  • Canada Revenue Agency, Questions and answers about Form T1135: https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/foreign-reporting/questions-answers-about-form-t1135.html

This article is general information about Canadian foreign reporting rules, not tax advice. T1135 obligations turn on the specific property you hold — consult a licensed Canadian tax professional if you are near the threshold or unsure what counts.

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