The CRA has updated its information on the new T1135 reporting regime. For those of you with clients who hold foreign property through a Canadian brokerage account, take note of the following:
Form T1135 excludes certain property from the detailed reporting requirement. The reporting exclusion provides that where the taxpayer has received a T3 or T5 from a Canadian issuer in respect of a particular specified foreign property, the details of that particular specified foreign property do not have to be disclosed in one of the tables on Form T1135. Whether the reporting exclusion applies must be determined for each specified foreign property and for each taxation year during which the property was held. For example, if there are numerous properties held in one investment account, only those properties for which a T3 or T5 was issued for a particular taxation year would be subject to the reporting exclusion in that particular year.
A specific property may be subject to the reporting exclusion in one year and not in another year depending on whether it earned income for which a T3 or T5 was issued.
The taxpayer is still required to file Form T1135 by the filing due date even if a T3 or T5 was issued in respect of all specified foreign property held during the taxation year. In this case, the taxpayer would complete the identification information and check the reporting exclusion box on Form T1135. The reporting exclusion is administrative and is not contained in the applicable provisions of the Income Tax Act.
