Form T1135 is an information return about specified foreign property. It does not replace reporting the income from that property on the income tax return.
For a Canadian resident who is subject to the requirement, the usual threshold is a combined cost amount of more than C$100,000 at any time in the year. It is not simply the December market value, nor a separate $100,000 allowance for every account.
Identify the property and its cost
List foreign accounts, investments and other potentially reportable property. Determine ownership shares, cost amounts in Canadian dollars and the relevant income. A foreign investment held through a Canadian broker can still be specified foreign property.
There are exclusions, including qualifying personal-use property and property held within registered plans such as an RRSP or TFSA. A foreign rental property and a personal-use holiday home therefore need different analysis. Do not assume every foreign asset is included or every Canadian-held account is excluded.
Apply the newcomer rule carefully
An individual is not required to file T1135 for the tax year in which they first became resident in Canada. That first-year exception does not remove resident-period foreign income reporting.
For future T1135 purposes, the CRA identifies fair market value at first residency as the new resident's cost amount for foreign property. Keep date-specific valuation evidence now rather than trying to reconstruct it years later. Returning residents should not assume every return to Canada creates another first-year exception.
Check the full year and retain the calculation
Selling property before December 31 does not erase a reporting requirement triggered earlier in the year. Keep statements that establish the relevant maximums and transactions, not just the final balance.
The form has its own completion requirements and penalties. Review the appropriate reporting method and deadline with the income tax filing. A file showing which assets were included, which were excluded and why is much stronger than a single unexplained total.
