T1135 fact sheet

The Foreign Income Verification Statement (Form T1135) is used to identify foreign investment property — what the Canada Revenue Agency (CRA) calls “specified foreign property.” Specifically, a Canadian resident individual, corporation, trust or partnership must file Form T1135 if they owned specified foreign property at any time during the year.

Specified foreign property is defined in subsection 233.3(1) of the Income Tax Act (Canada) and includes but is not limited to:

• 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 held by the taxpayer or by an agent on behalf of the taxpayer;
• an interest in a non-resident trust that was acquired for consideration, other than an interest in a non-resident trust that is a foreign affiliate for the purposes of section 233.4 of the Act;
• shares of corporations resident in Canada held by you, or for you, outside Canada;
• an interest in a partnership that holds a specified foreign property unless the partnership is required to file Form T1135;
• an interest in, or right with respect to, an entity that is a non-resident;
• a property that is convertible into or exchangeable for a property that is specified foreign property; or that 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; and
• precious metals, gold certificates and futures contracts held outside Canada.

Specified foreign property does not include:

• a property used or held exclusively for carrying on an active business;
• a share of the capital stock or indebtedness of a foreign affiliate;
• an interest in a trust described in paragraph (a) or (b) of the definition of “exempt trust” in subsection 233.2(1) of the Act;
• a personal-use property as defined in section 54 of the Act; and
• an interest in, or a right to acquire, any of the above-noted excluded foreign property.

Speak with your tax advisor to determine whether your specific assets are considered specified foreign property.

No. Specified foreign property held in a registered plan is excluded from Form T1135 reporting requirements.

Yes, there are penalties for failing to file Form T1135 by the reporting deadline, and for making a false statement or omitting required information. For details, please visit the CRA’s table of penalties.

You will receive a Foreign Securities Report Package if, according to the information we have in our systems, you held specified foreign property at MD that had an aggregate cost of more than C$100,000 in any month(s) during the current tax year. Please review your own records to make sure that the cost amounts used in the package are in alignment. Ultimately, it is your responsibility to determine whether you have to complete Form T1135 or not.

The package has two reporting components: the Foreign Securities Report and the Details of Foreign Securities Report.

• The Foreign Securities Report is an aggregated report produced by MD to help clients complete Form T1135.
• The Details of Foreign Securities Report is a breakdown of the Foreign Securities Report showing data used. Clients should compare these data to their own records to ensure accuracy and completeness.

Use the information in the Foreign Securities Report and Details of Foreign Securities Report to help you complete Section 7 of Form T1135.

The information in the reports is an amalgamation of your investment statements, transaction receipts and tax slips. You should also refer to your own records when completing Form T1135.

1. Review the Details of Foreign Securities Report first and compare it with your records to ensure accuracy and completeness. Note: Always use the information in your records if it is different from the information in the Details of Foreign Securities Report.
2. When you have reviewed the information reported in the Details of Foreign Securities Report and determined it to be accurate and complete, you should use the Foreign Securities Report Package to populate Section 7 of Form T1135.

The Foreign Securities Report Package will be ready in mid-February. This timing is because the Foreign Securities Report and Details of Foreign Securities Report use information from multiple tax slips and statements, which are generally available by the end of January.

The currency used is Canadian dollars.

No, MD and MDPIM mutual funds are not considered to be specified foreign property for reporting purposes. Although some MD and MDPIM mutual funds do hold underlying foreign investments, these mutual funds are Canadian registered mutual funds and do not need to be reported on Form T1135.

A Foreign Securities Report Package is issued for every joint account and individual account. If you hold both individual and joint accounts, you will receive two Foreign Securities Report Packages.

To limit confusion, we do not send the package to clients who, based on the information we have in our systems, did not hold specified foreign property at MD that had an aggregate cost of more than C$100,000 in any month(s) during the current tax year. However, please review your records to be sure that your specified foreign property had an aggregate cost below the reporting threshold.

Ultimately, it is your responsibility to determine whether you need to complete Form T1135 or not. If, based on your records and assets held outside MD, you believe you require a Foreign Securities Report Package, please contact your MD Advisor*, who can provide you with a copy, or visit your My MD account to access an online copy.

Please contact your MD Advisor*, who can provide you with a copy of your Foreign Securities Report Package, or visit your My MD account to access an online copy.

No, the Foreign Securities Report Package is not provided to the CRA. The package is created to help you complete Form T1135; no information is sent to the CRA. If your records conflict with the information in the Foreign Securities Report Package, you should use your records to complete Form T1135.

The reports in the Foreign Securities Report Package are not official tax statements and are not submitted to the CRA. The package is provided for your information only. The Foreign Securities Report and Details of Foreign Securities Report are based on the information in our systems. Some third-party securities complete their own tax reporting and do not transmit any information to MD, which means we would not have that information. If your records conflict with the information in the Foreign Securities Report Package, you should use your records to complete Form T1135.

Specified foreign property is identified using the information in our systems at the time the reporting components of the Foreign Securities Report Package are created. If your records conflict with the information in the Foreign Securities Report Package, you should use your records to complete Form T1135. The reporting components of the Foreign Securities Report Package are not official tax statements and are not provided to the CRA. They are provided for your information only.

Income/loss from limited partnerships is not included in the Foreign Securities Report Package. This is because a significant number of limited partnerships complete their own tax reporting and do not provide information to MD. To avoid confusion and misrepresentation, we have left all income/loss from limited partnerships out of the package. This information can be found in the investment and tax statements provided by the limited partnerships, such as the CRA’s T5013 – Statement of Partnership Income, or the United States Internal Revenue Service’s Schedule K-1.

The reporting components of the Foreign Securities Report Package are not official tax statements and are therefore not provided to the CRA; they are provided for your information only. To enable us to deliver the package in a timely manner, we collect information from our internal systems on a specific date.

Occasionally, third-party institutions may provide additional information or adjustments after that date, which means this information will not be included in the package. Also, some third-party securities complete their own tax reporting and do not transmit any information to MD. If your records conflict with the information in the Foreign Securities Report Package, you should use your records to complete Form T1135.

In rare cases, the cost value of a security may be zero or nominal. This is likely in situations where the cost amount was not provided to MD, due to corporate re-organizations or transfers-in. In these cases the capital gain we report may be overstated. Please note that the reporting components of the Foreign Securities Report Package are not official tax statements and are not provided to the CRA. They are provided for your information only. If your records conflict with the information in the Foreign Securities Report Package, you should use your records to complete Form T1135.

To enable us to deliver the package in a timely manner, we collect information from our internal systems on a specific date. It is possible that information used to identify income for a specified foreign property was not provided to MD or was provided after this date. If your records conflict with the information in the Foreign Securities Report Package, you should use your records to complete Form T1135.

No, MD cannot help you to complete Form T1135, nor can we advise whether you need to complete and submit the form or not. This is because you may have specified foreign property that is not held with us. Also, we cannot help you decide which, if any, of your investments meet the definition of specified foreign property. These types of questions should be directed to your accountant or tax specialist.