The world has become a lot smaller.
Do you have foreign bank accounts and assets? You have to report them. HerrickGlobal advisors are here to help.
According to the Canada Revenue agency, all Canadian resident taxpayers (including non-resident trusts deemed resident in Canada by section 94 of the Act) are required to file the Form T1135, Foreign Income Verification Statement if at any time in the year the total cost amount of all specified foreign property to the taxpayer was more than $100,000 (Canadian).
An individual (other than a trust) does not have to file Form T1135 for the year in which the individual first becomes a resident of Canada (section 233.7 of the Act).
The following entities do not have to file this form:
- a mutual fund corporation or mutual fund trust;
- a non-resident-owned investment corporation;
- a person all of whose taxable income is exempt from Part I tax;
- a registered investment under section 204.4 of the Act;
- a trust described in any of paragraphs (a) to (e.1) of the definition of trust in subsection 108(1) of the Act;
- a trust in which all of the persons beneficially interested are persons described above;
- a partnership in which all the members are persons described above; and
- a partnership where the share of the partnership's income or loss attributable to non-resident members is 90% or more of the income or loss of the partnership.
What property do you have to report?
You are required to report all specified foreign property in accordance with subsection 233.3(1) of the Act which includes:
- funds or intangible property (patents, copyrights, etc.) situated, deposited or held outside Canada;
- tangible property situated outside of Canada;
- a share of the capital stock of a non-resident corporation held by the taxpayer or by an agent on behalf of the taxpayer;
- an interest in a non-resident trust that was acquired for consideration, other than an interest in a non-resident trust that is a foreign affiliate for the purposes of section 233.4 of the Act;
- shares of corporation resident in Canada held by you or for you outside Canada;
- an interest in a partnership that holds a specified foreign property unless the partnership is required to file Form T1135;
- an interest in, or right with respect to, an entity that is a non-resident;
- a property that is convertible into, exchangeable for, or confers a right to acquire a property that is specified foreign property;
- a debt owed by a non-resident, including government and corporate bonds, debentures, mortgages, and notes receivable;
- an interest in a foreign insurance policy; and
- precious metals, gold certificates, and futures contracts held outside Canada. Specified foreign property does not include:
- a property used or held exclusively in carrying on an active business;
- a share of the capital stock or indebtedness of a foreign affiliate;
- an interest in a trust described in paragraph (a) or (b) of the definition of "exempt trust" in subsection 233.2(1) of the Act;
- a personal-use property as defined in section 54 of the Act; and
- an interest in, or a right to acquire, any of the above-noted excluded foreign property.
At HerrickGlobal, we can give you peace of mind that comes with knowing you will not face the unknown alone. Our highly trained advisors can handle all of your tax filing needs quickly and efficiently. Schedule an appointment today - we look forward to meeting you!