Why Worry?
As Canadian income tax residents are taxed on their worldwide
income, the Government of Canada is concerned about the
underreporting of "offshore" income. As well, Canada
Revenue Agency (CRA) is always seeking to glean insight into the
tax-planning and tax-sheltering behaviour of investors. Form T1135
requires reporting by Canadian resident individuals (as well as
trusts and most corporations) of foreign property holdings in
excess of threshold amounts (i.e. cost amount more than CAD
$100,000) to provide information to the Canadian tax authorities to
address these concerns. Generally, the penalty for failure to file
a Form T1135 is $2,500 for each instance of failure (i.e. for an
individual taxpayer, for each year of failure). In addition to
financial penalties, failure to file the T1135 on time and to
properly report income from specified foreign property for 2013 and
subsequent taxation years could result in an extension of the
normal reassessment period
