Form T1135: Your Complete Guide to the CRA’s Foreign Income Verification Statement 2025

If you’re a Canadian resident with investments or property outside Canada, the Canada Revenue Agency (CRA) may require you to file Form T1135:  Foreign Income Verification Statement.

It’s not an optional disclosure; failing to file can lead to hefty penalties, even if you didn’t earn income from those assets. This guide explains who needs to file Form T1135, what counts as “foreign property,” how to complete it correctly, and the costly consequences of getting it wrong.

What Is Form T1135?

Form T1135 is the CRA’s way of making sure Canadian residents report certain foreign assets worth more than CAD 100,000 at any time during the year. It’s part of Canada’s measures to combat tax evasion and ensure that foreign income is properly reported.

You may have to pay monetary penalties if you were unable to file this form or did not completely disclose your ownership of a foreign property. You may even incur negligence charges in certain instances. Miss filing it, even with no income, and you face $2,500 fines or long audits. Connect with our cross-border tax accountant for expert help.

Who Needs to File Form T1135?

You must file Form T1135 if:

• You are a Canadian tax resident (factual resident, deemed resident, or certain deemed non-residents under the Canada–U.S. Tax Treaty).
• At any point during the year, the total cost amount of your specified foreign property was more than CAD 100,000.

Here’s who and what it covers:

• Covers you, corporations, trusts, or partnerships.
• Includes stuff like U.S. stocks or crypto outside Canada.
• New residents don’t file their first year.
• CRA looks at your tax residency, not citizenship. Have a look at factual vs. deemed residency for taxes in Canada. 

What Counts as Specified Foreign Property? Thresholds and Exclusions

The CRA defines specified foreign property broadly. Common examples include:

• Funds in foreign bank accounts.
• Shares of non-Canadian corporations (including those held in Canadian brokerage accounts).
• Foreign rental or vacation properties (unless they’re for personal use only).
• Interests in foreign trusts.
• Certain debts owed by non-residents.
• Precious metals, art, or collectibles located outside Canada.

Exclusions:

• Property used solely for personal use (e.g., a vacation home you never rent out).
• RRSPs, TFSAs, and other Canadian-registered plans (even if they hold foreign investments).
• Shares of Canadian corporations, even if they own foreign assets.

Threshold: 

Over $100,000 CAD means file; $250,000+ needs extra details.

How to File Form T1135

The CRA offers two reporting methods:

1. Simplified Reporting – If your total foreign property cost is between CAD 100,000 and CAD 250,000, you can report the total income and the total cost amount for each category of property.
2. Detailed Reporting – Required if your foreign property exceeds CAD 250,000. You’ll need to list each property separately, along with:

• The country where the property is located.
• The maximum cost amount during the year.
• Cost amount at year-end.
• Income or gains earned.

You can file Form T1135 electronically with your tax return or separately via the CRA’s “Submit Documents” portal.

Choosing the Right Reporting Method for CRA Form T1135

When filing your Form T1135 (Foreign Income Verification Statement), the first step is to determine which reporting method applies to you. The method you choose depends on the total cost of your specified foreign assets during the tax year.

Tip: If your asset value hovers around the $250,000 mark, gather detailed records early—this will save you stress if you cross the threshold and must switch from the simplified to the detailed method.

Form T1135 Reporting Methods at a Glance

How the CRA Detects Unreported Foreign Income for Form T1135 Compliance

The Canada Revenue Agency (CRA) takes Form T1135 reporting seriously, and they have multiple ways to ensure Canadians are accurately declaring foreign assets and income. Here’s how they identify potential non-compliance:

1. Increased Review of Tax Returns
   The CRA has dedicated more resources and trained staff to carefully review tax filings for foreign income reporting errors. With more eyes on returns, especially for taxpayers with international investments, it’s harder for omissions to go unnoticed.
2. Focus on High-Net-Worth Individuals
   Wealthy Canadians are often the focus of CRA foreign asset audits because they are more likely to hold significant investments abroad, such as foreign stocks, real estate, or offshore accounts. The CRA conducts detailed checks to verify the accuracy of these declarations.
3. Cracking Down on Offshore Evasion
   The CRA actively investigates strategies designed to hide money overseas, including undisclosed bank accounts or complex ownership structures. They also work with global partners to share tax information under international agreements.
4. Advanced Technology and Data Matching
   Using sophisticated data analytics, the CRA can detect unusual patterns or inconsistencies between your reported income and third-party data, such as foreign bank records. These systems flag potential issues long before a full audit takes place.

Filing Deadlines for Form T1135

The deadline is the same as your income tax return deadline:

• Individuals: April 30 (or June 15 if self-employed, but tax balance still due April 30).
• Corporations: Six months after year-end.

Penalties for Late or Missing Form T1135

The CRA enforces strict penalties for non-compliance:

• Basic penalty: $25 per day late, up to a maximum of $2,500.
• Gross negligence penalty: $500 per month, up to $12,000, if the CRA believes the omission was deliberate or careless.
• Additional reassessment period: The CRA can reassess your return for three years beyond the normal period if T1135 isn’t filed or is incomplete.

How to Avoid CRA Penalties for Form T1135 Non-Compliance

You can avoid T1135 trouble with simple steps. Here’s how to keep things clean:

• File on Time: Send your T1135 with your taxes by April 30, 2026, for 2025 assets. NETFILE is the fastest.
• List All Assets: Include all foreign stuff over $100,000 CAD, even with no income. Check it twice.
• Use the Voluntary Disclosures Program: If you missed a past filing, fix it with the CRA’s VDP to stay safe.

Common Mistakes to Avoid

• Thinking that holding U.S. stocks in a Canadian brokerage account means you’re exempt; you’re not.
• Forgetting foreign accounts that had no income.
• Miscalculating the cost amount (use the purchase price in Canadian dollars, not the current market value).
• Not filing because you sold the asset mid-year — reporting is still required if you owned it at any point.

Wrap Up

If you’re a Canadian resident with foreign investments, Form T1135 compliance is non-negotiable. The CRA uses this form to match information from foreign banks, tax authorities, and financial institutions, so missing or inaccurate reporting can trigger audits and costly penalties.

When in doubt, consult a cross-border tax specialist — especially if you have complex holdings in multiple countries or are also subject to U.S. foreign asset reporting like FBAR or FATCA. If you’re dealing with cross-border tax issues, especially between Canada and the U.S., figuring out your residency should be your very first step. Whether you’re facing challenges with dual taxation, seeking to understand your tax filing obligations, or looking for strategic tax planning advice, Filing Taxes offers the expertise you need.

Feel free to reach out to Filing Taxes at 416-479-8532. Schedule an NTR engagement appointment with us and take the first step toward proper management of your finances.

Disclaimer: The information provided on this page is intended to provide general information. The information does not consider your personal situation and is not intended to be used without consultation from accounting and financial professionals. Salman Rundhawa and Filing Taxes will not be held liable for any problems that arise from the usage of the information provided on this page.