Getting shipwrecked on T1135 island an unpleasant fate for taxpayers
File this form late and you risk a $25 a day fine, up to $2,500 a year — and the CRA is relentless
Just sit right back and you’ll hear a tale. A tale of a fateful trip.”
Sherwood Schwartz and George Wyle weren’t thinking tax when they composed “The Ballad of Gilligan’s Isle” in 1964. But those memorable lyrics came to mind as I read of a taxpayer’s recent battle with the Canada Revenue Agency and her trip to court.
The case involved the notorious Form T1135, Foreign Income Verification Statement, which is required to be filed if you own foreign property whose total cost exceeds $100,000 at any point in the year. For most taxpayers, the form for 2017 was due by this past Monday April 30th, which was the normal filing date.
The form must be filed to report the ownership of most foreign property, including the obvious things, like funds in a Swiss bank account or your Florida rental property. But it’s also required for foreign stocks held in your Canadian, non-registered brokerage account. Excluded are foreign securities held inside of pooled products, like Canadian mutual funds, or inside a registered account like an RRSP, RRIF, TFSA, RESP or RDSP. Also excluded is personal use property, such as a vacation home, which is not ordinarily rented out.