CRA .. foreign accounts?
Do you know since when/what year did CRA start inquring about citizens owning foreign assets over $100k CAD?
I recently filed my taxes and noticed that item.. I've not noticed it before.
May 22nd, 2020 12:38 am
May 22nd, 2020 12:49 am
May 22nd, 2020 8:13 am
... and penalties for non-complianceWho has to report?
Form T1135, Foreign Income Verification Statement, must be filed by:
Canadian resident individuals, corporations, and certain trusts that, at any time during the year, own specified foreign property costing more than $100,000
certain partnerships that hold more than $100,000 of specified foreign property
What property has to be reported?
Specified foreign property is defined in subsection 233.3(1) of the Income Tax Act and includes:
funds or intangible property (patents, copyrights, etc.) situated, deposited or held outside Canada
tangible property situated outside Canada
a share of the capital stock of a non-resident corporation
shares of corporations resident in Canada held outside Canada
an interest in a non-resident trust that was acquired for consideration
an interest in a partnership that holds a specified foreign property unless the partnership is required to file Form T1135
a property that is convertible into, exchangeable for, or confers a right to acquire a property that is specified foreign property
a debt owed by a non-resident, including government and corporate bonds, debentures, mortgages, and notes receivable
an interest in a foreign insurance policy
precious metals, gold certificates, and futures contracts held outside Canada
May 22nd, 2020 8:17 am
I am certain that it was always mandatory in the last 30 years and the $100k CAD threshold was never updated.
May 22nd, 2020 9:30 am
May 22nd, 2020 9:51 am
Brokers are only reporting dispositions of securities to CRA - realized taxpayer income which trigger the tax liability. Open positions, which represent taxpayer assets, are not reported by brokers. This is the whole purpose of T1135.brunes wrote: ↑ I am quite sure that a huge percentage of the population does not accurately file their T1135 because everyone assumes stocks are exempt, when they are not.
It's one of the most vague, strange, and arguably nonsensical things in the current tax system that you have to double-report your US securities in this way, especially since they construe no tax burden.
It really needs to be escalated to MPs for an overhaul.
Read this story, its quite interesting and if you ever get peanalized for not filing, could be good case law to fall back on. Basically the judge threw the penalties out because of the vagaries around it. https://business.financialpost.com/pers ... -this-form
May 22nd, 2020 12:25 pm
May 22nd, 2020 12:38 pm
May 23rd, 2020 7:24 pm
May 23rd, 2020 8:39 pm
Getting the information from brokers is impractical because:andrew4321 wrote: ↑ Brokers are only reporting dispositions of securities to CRA - realized taxpayer income which trigger the tax liability. Open positions, which represent taxpayer assets, are not reported by brokers. This is the whole purpose of T1135.
I would not call this double reporting but seems incorect and discriminatory the fact that similar Canadian assets are not being reported. If the Canadian parliament establishes a need for the government to log & track assets held by taxpayers, they should get the information directly from brokers, the way they do it for TFSA accounts.
May 24th, 2020 10:32 am
First of all, it doesn't matter how difficult it is, you have a legal obligation to provide the information.KyleTO wrote: ↑ Getting the information from brokers is impractical because:
1) If a taxpayer held $100,000 worth of foreign assets across two or more brokers, any individual broker would be unaware the threshold has been crossed, and
2) Many Canadian taxpayers hold assets with foreign brokerages that may or may not comply with Canadian reporting requirements and operate outside of Canadian jurisdiction.