As Canadians, you must be aware of the importance around the rules for declaring foreign property on your Federal tax return.

Whether you’re born and raised in Canada or a naturalized citizen/immigrant to this country, you must declare any foreign property you own annually, as part of your tax filing.

The rules only apply to certain categories of foreign property with a value in excess of $100,000.

If you own foreign property with a cost in excess of $100,000 at any period during the year, you must make an annual disclosure with the Canada Revenue Agency.

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This property can be physical or non physical and includes;

1. Bank accounts

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2. Stocks, bonds (Even if you have stocks and bonds held in Canadian brokerage accounts, you need to report them)

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3. Real estate

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This declaration is made using Form T1135, Foreign Income Verification Statement.

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Form T1135 requires detailed information about your foreign property. This includes any income generated, property location and the maximum cost during the year.

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Penalties of $25 per day, up to $2,500 per taxpayer, are payable for non-disclosure or late filing. When completing your tax return, you have to answer the question, “Did you own or hold foreign property at any time in the year with a total cost of more than CAN$100,000?” If your answer was “yes” to this question, you must complete Form T1135.

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You must complete this form if you are a Canadian resident, or you own a foreign corporation or trust, or you’re a partner in a foreign business.

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Since 1997, Canadians have been required by tax law to declare foreign property in excess of $100,000.

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If you have previously neglected to submit this form, you can still submit a Voluntary Disclosure, to avoid costly penalties. When you do this, simply include a T1135 form for previous tax years with your disclosure.

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