Personal Finance

I have not filed T1135 form in the past years - what are my options?

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Newbie
Feb 20, 2015
73 posts
27 upvotes
Toronto, ON

I have not filed T1135 form in the past years - what are my options?

So I just now figuring out that I was supposed to file T1135 tax for for Foreign Property as I have US/Global ETFs in my "open" accounts with value over 100k. I assumed that stocks/ETFs in brokerage account do not qualify as "foreign property". So my answer to "Do you have foreign property over 100k" was always "No". I am finding now that I was wrong. So what are my options? Do Revenue Canada has voluntary disclosure option when I can amend my previous returns without penalty? In 2013 T1135 form has "shortcut" for "T5/T3 reporting exception" and as probably all ETFs had some sort of T5 or T3, my T1135 form should be very simple, right?

Again, what are my option for not filing T1135 for past years?

Additional info - here is article about penalties: http://www.advisor.ca/news/industry-new ... costly-494

Another question - in 2013 return if you received T3/T5 then you can utilize "Reporting Exception". Does that mean that if all my income was part of T3/T5, then I do not have to fill T1135 for year 2013?
26 replies
Deal Addict
User avatar
Dec 8, 2010
2564 posts
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You need to talk to a tax professional, ASAP. Or call the CRA and find out.

It's certainly not a good thing to not have disclosed.
Sr. Member
Aug 16, 2010
561 posts
151 upvotes
Thornhill
ViRedFlag wrote: Again, what are my option for not filing T1135 for past years?
http://www.cra-arc.gc.ca/voluntarydisclosures/

ViRedFlag wrote: Another question - in 2013 return if you received T3/T5 then you can utilize "Reporting Exception". Does that mean that if all my income was part of T3/T5, then I do not have to fill T1135 for year 2013?
As long as you owned no other foreign assets not included in your 2013 T5/T3(s).

If, say, you owned US stocks that did not return any income (e.g. non dividend paying), you would not have received a T5, and you would need to fill out a T1135 to report it.
Sr. Member
Aug 16, 2010
561 posts
151 upvotes
Thornhill
UPDATE: I was incorrect.

You still need to fill out and submit a T1135 even if you are utilizing a Reporting Exception; you are just spared having to fill out details on the form, but you still need to submit the form.
Deal Fanatic
Aug 21, 2007
6055 posts
853 upvotes
Markham
youll have to go under the voluntary disclosure program to avoid penalties, which are pretty big for t1135
Newbie
Feb 20, 2015
73 posts
27 upvotes
Toronto, ON
OK, I just talked to Revenue Agency. I was assured multiple times that if my Foreign Investments are held in Canadian Bank Institution and I receive T3/T5 on these investments I do not have fill out T1135 form. I was told to read this FAQ (41):
http://www.cra-arc.gc.ca/tx/nnrsdnts/cm ... ng.html#h4
I was told this FAQ is up to date as of 2014.
I already had my "Voluntary Disclosure Program" form, "T1 Adjustment" form and T1135 for previous years ready, but it appears I do not need them anymore.
I was told that there is a lot of incorrect information going around and that she was sure about requirements and that I do not need to get my information anywhere else, but use just Revenue Canada website. So I do not need to file T1135 in my case.

In case I still want to amend my returns (again I was told I do not need to, but I insisted what if..), she told me that first I have to send in "Voluntary Disclosure Form" and wait for reply - in no case I should send Voluntary Disclosure and T1135 form together, as they might process them in parallel and assess penalties and then is going to be too late to argue.
Deal Fanatic
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Apr 11, 2008
5754 posts
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ViRedFlag wrote: OK, I just talked to Revenue Agency. I was assured multiple times that if my Foreign Investments are held in Canadian Bank Institution and I receive T3/T5 on these investments I do not have fill out T1135 form. I was told to read this FAQ (41):
http://www.cra-arc.gc.ca/tx/nnrsdnts/cm ... ng.html#h4
I was told this FAQ is up to date as of 2014.
I already had my "Voluntary Disclosure Program" form, "T1 Adjustment" form and T1135 for previous years ready, but it appears I do not need them anymore.
I was told that there is a lot of incorrect information going around and that she was sure about requirements and that I do not need to get my information anywhere else, but use just Revenue Canada website. So I do not need to file T1135 in my case.

In case I still want to amend my returns (again I was told I do not need to, but I insisted what if..), she told me that first I have to send in "Voluntary Disclosure Form" and wait for reply - in no case I should send Voluntary Disclosure and T1135 form together, as they might process them in parallel and assess penalties and then is going to be too late to argue.
That FAQ seems to contradict what she said.
Sr. Member
Aug 17, 2008
513 posts
234 upvotes
Quebec
ViRedFlag wrote: OK, I just talked to Revenue Agency. I was assured multiple times that if my Foreign Investments are held in Canadian Bank Institution and I receive T3/T5 on these investments I do not have fill out T1135 form. I was told to read this FAQ (41):
http://www.cra-arc.gc.ca/tx/nnrsdnts/cm ... ng.html#h4
I was told this FAQ is up to date as of 2014.
I already had my "Voluntary Disclosure Program" form, "T1 Adjustment" form and T1135 for previous years ready, but it appears I do not need them anymore.
I was told that there is a lot of incorrect information going around and that she was sure about requirements and that I do not need to get my information anywhere else, but use just Revenue Canada website. So I do not need to file T1135 in my case.

In case I still want to amend my returns (again I was told I do not need to, but I insisted what if..), she told me that first I have to send in "Voluntary Disclosure Form" and wait for reply - in no case I should send Voluntary Disclosure and T1135 form together, as they might process them in parallel and assess penalties and then is going to be too late to argue.

You should read FAQ 41: ''you still have to take the property into account in determining whether the total cost amount of all specified foreign property you held at any time in the year exceeds $100,000, and whether or not you need to submit a form T1135''
Deal Fanatic
User avatar
Apr 11, 2008
5754 posts
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I can never understand why so many middle class people are against a simple head tax without all these forms. Sigh...
Newbie
Oct 2, 2012
36 posts
14 upvotes
It is amazing the most common situation, i.e. US/foreign holdings within a Canadian broker 's account who issues a T5 , and the CRA instructions are buried in a FAQ. This why we have to say “talk to a tax professional”.

How to interpret:

''you still have to take the property into account in determining whether the total cost amount of all specified foreign property you held at any time in the year exceeds $100,000, and whether or not you need to submit a form T1135''


I'm not the expert, please correct me if I get this situation wrong:

- You have $30K of foreign property, say stocks, with a foreign broker, and CRA would not know you had this unless you reported it, and you normally would not as it is under $100K.
- You now buy a US stock within a Canadian broker 's account, $80K value, you get a T5. You do not have to report this property on T1135 due the the above mentioned T3 / T5 Reporting exception.
- However, you now exceed $100,000, so you have to tick that box on the T1.
- And, all of the sudden have to report that $30K of foreign property on the T1135.
Newbie
User avatar
Oct 18, 2011
39 posts
4 upvotes
Ottawa
That FAQ is for 2013. You absolutely need to fill out the T1135 for 2014.
Deal Addict
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Apr 29, 2002
3855 posts
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Mississauga
This is pretty straightforward if you just read the actual 2013 and 2014 rules for T1135.

@ViRedFlag: You'll need to file for past year missing T1135s under the voluntary disclosure program, including 2014 and previous years where you had over $100K in US/foreign stock, even if you held them in a domestic brokerage.
@huaraz: As trent08 mentioned, this is only valid for 2013, and still means the form needs to be filed. Any other year will also need to be filed according to the requirements of that year's T1135.

edit: I found this great link from the CPA that has CRA provided answers to many questions that we might have. Hope you find it useful.
Newbie
Oct 2, 2012
36 posts
14 upvotes
Thank you @trent08 and @simms.

I see where it states that the T3 / T5 Reporting exception was eliminated in 2014:

http://www.cra-arc.gc.ca/tx/nnrsdnts/cm ... g-eng.html

Form T1135 – Reporting for 2014 and later tax years
After consultations with external stakeholders, the Canada Revenue Agency has implemented the following changes to form T1135 for the 2014 and later tax years:
4. The reporting exception that excludes certain property from the detailed reporting requirement where the taxpayer has received a T3, Statement of Trust Income Allocations and Designations or a T5, Statement of Investment Income from a Canadian issuer is eliminated.
Newbie
Oct 2, 2012
36 posts
14 upvotes
Happy ending. Thanks everyone. I went through the voluntary disclosure program for 2014 and prior. No issues. I'm on top of it this year. I sympathise with @Archanfel on how over-complicated our tax code is. This specific disclosure is a pain having to pull financial statements for the whole year to get the the max and end-of-year holdings which may be in different accounts and to do all the currency conversions.
Deal Expert
User avatar
Sep 19, 2004
26763 posts
9333 upvotes
where I belong
huaraz wrote: Thank you @trent08 and @simms.

I see where it states that the T3 / T5 Reporting exception was eliminated in 2014:

http://www.cra-arc.gc.ca/tx/nnrsdnts/cm ... g-eng.html

Form T1135 – Reporting for 2014 and later tax years
After consultations with external stakeholders, the Canada Revenue Agency has implemented the following changes to form T1135 for the 2014 and later tax years:
4. The reporting exception that excludes certain property from the detailed reporting requirement where the taxpayer has received a T3, Statement of Trust Income Allocations and Designations or a T5, Statement of Investment Income from a Canadian issuer is eliminated.
huaraz wrote: Happy ending. Thanks everyone. I went through the voluntary disclosure program for 2014 and prior. No issues. I'm on top of it this year. I sympathise with @Archanfel on how over-complicated our tax code is. This specific disclosure is a pain having to pull financial statements for the whole year to get the the max and end-of-year holdings which may be in different accounts and to do all the currency conversions.
Indeed, if domestic brokers (TD/RBC/BMO/etc..) already reports it and issues whatever, CRA should know about it already without us sending T1135

I called CRA (2015? 2014?) to ask on this and they told me no T1135 for USD accounts/holdings in my TDDI too...
Which Credit Cards to sign up? >> Jerry's Mega Thread of Credit Cards Q&A
Sr. Member
Jan 15, 2015
643 posts
410 upvotes
ViRedFlag wrote: So I just now figuring out that I was supposed to file T1135 tax for for Foreign Property as I have US/Global ETFs in my "open" accounts with value over 100k. I assumed that stocks/ETFs in brokerage account do not qualify as "foreign property". So my answer to "Do you have foreign property over 100k" was always "No". I am finding now that I was wrong. So what are my options? Do Revenue Canada has voluntary disclosure option when I can amend my previous returns without penalty? In 2013 T1135 form has "shortcut" for "T5/T3 reporting exception" and as probably all ETFs had some sort of T5 or T3, my T1135 form should be very simple, right?

Again, what are my option for not filing T1135 for past years?

Additional info - here is article about penalties: http://www.advisor.ca/news/industry-new ... costly-494

Another question - in 2013 return if you received T3/T5 then you can utilize "Reporting Exception". Does that mean that if all my income was part of T3/T5, then I do not have to fill T1135 for year 2013?
I believe I answered most of your questions from your original post of Apr 30, 2015. It is not the income that is important for T1135 reporting, but rather the total aggregate worth in CAD of all your US and foreign holdings in various non-registered accounts (as calculated by monthly statements), even though held with Canadian institutions.

If you are fortunate to have non-registered assets held jointly with a spouse, you should be able to split up the assets for reporting taxable income, and perhaps fall below the $100K CAD amount so as to not have to file the T1135.

I did file T1135s for 2013 and 2014, but I need to decide whether or not I need to file for 2015 based on a clarification of the rules (as others have mentioned).

See the link to my previous post: income-tax-form-t1135-year-2013-a-1725563/#post22381883
Newbie
Oct 2, 2012
36 posts
14 upvotes
SAM3674 wrote: ... but I need to decide whether or not I need to file for 2015 based on a clarification of the rules (as others have mentioned)[/url]
@SAM3674, not sure what leads you to think filing T1135 may not be required after 2014, I'm expecting to file this every year from now.

CRA has eased the reporting pain for 2015 with a new form, allowing a simplified reporting method if you are under $250K they only want to know what type of property you have, and where, and total income/gain(loss). Good news for ones with US stock in Canadian brokerage accounts since all that income would be on the T4/T5, and the gain(loss) you would have to determine anyway.
This saves having to do additional work pulling all the monthly statements, to segregate the US stocks, and reporting the max holdings and end-of-year holdings.

http://www.cra-arc.gc.ca/E/pbg/tf/t1135/README.html

Be careful with this, they seem to be going after the fines, as this unfortunate guy was rolled for $2500:

t1135-late-filing-penalty-dispute-1844761/
Sr. Member
Jan 15, 2015
643 posts
410 upvotes
huaraz wrote: @SAM3674, not sure what leads you to think filing T1135 may not be required after 2014, I'm expecting to file this every year from now.

CRA has eased the reporting pain for 2015 with a new form, allowing a simplified reporting method if you are under $250K they only want to know what type of property you have, and where, and total income/gain(loss). Good news for ones with US stock in Canadian brokerage accounts since all that income would be on the T4/T5, and the gain(loss) you would have to determine anyway.
This saves having to do additional work pulling all the monthly statements, to segregate the US stocks, and reporting the max holdings and end-of-year holdings.

http://www.cra-arc.gc.ca/E/pbg/tf/t1135/README.html

Be careful with this, they seem to be going after the fines, as this unfortunate guy was rolled for $2500:

t1135-late-filing-penalty-dispute-1844761/
In my case, I'm able to split incomes unevenly for certain years, so only one spouse needs to file. It is not a big deal to file for both spouses though - better safe than sorry.

I was referring to what jerryhung mentioned about CRA saying no T1135?? which seems unclear so I was going to reread the rules. I would likely file for 2015 regardless as you don't get penalized for declaring when unnecesaary.
jerryhung wrote: Indeed, if domestic brokers (TD/RBC/BMO/etc..) already reports it and issues whatever, CRA should know about it already without us sending T1135

I called CRA (2015? 2014?) to ask on this and they told me no T1135 for USD accounts/holdings in my TDDI too...
Newbie
Feb 20, 2015
73 posts
27 upvotes
Toronto, ON
As somebody revived my old thread here is update - I actually did voluntary disclosure and submitted all my forms and received confirmation that is all good and I do not need to pay any penalty.
Deal Guru
Feb 4, 2015
10332 posts
6698 upvotes
Canada, Eh!!
I believe for the voluntary disclosure it has to be a year after form was due [?or return filed] to be eligible for voluntary disclosure; I understand that to mean that need to wait until at least after April 30, 2016 before doing a voluntary disclosure for 2014 tax year.

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