New foreign property reporting

On July 8, 2014 the Canada Revenue Agency released a new version of form T1135 Foreign Income Verification Statement. After July 7, 2014 taxpayers who have over $100,000 of foreign property and investments must use the new form to report information about their “specified foreign property”  for 2014 and later taxation years.

There are several new items and clarifications on the revised form:

The T3/T5 reporting exception has been eliminated. Taxpayers must report all “specified foreign property” even if the income from it is included on a T3 or T5 slip.

The instructions clarify what exchange rate to use for foreign currency conversions.

The explanation of what is included in the definition of “specified foreign property” is changed to point out that shares of a Canadian company that are held outside Canada are considered “specified foreign property”. This would also apply to other Canadian investments that are held outside Canada.

A new category is added to the form for reporting “specified foreign property” that is held in a Canadian securities dealer account. This new category allows taxpayers to report totals by country for “specified foreign property” held in a Canadian securities dealer account, rather than reporting the details for each item in the account. The taxpayer can report country by country totals for each account, or for each securities dealer they have an account with.

CRA’s announcement and links to the new form can be found at http://www.cra-arc.gc.ca/E/pbg/tf/t1135/