Are you a Canadian taxpayer with foreign assets exceeding $100,000 CAD? If so, it's crucial to be aware of the T1135 form and its requirements. Let's delve into what this form is, why it matters, and the penalties for non-compliance.
What is the T1135 Form? The T1135 form, also known as the Foreign Income Verification Statement, is a crucial document that Canadians with specified foreign property exceeding $100,000 CAD must file annually.
The filing is required for individuals, corporations and certain trusts.
What is Specified Foreign Property? Specified foreign property includes bank accounts, stocks, real estate, and more held outside Canada. This also includes stocks of US companies held inside Canadian accounts. However, it does not include assets held inside your registered accounts (i.e. RRSP and TFSAs). Cryptocurrency may also be considered a foreign asset and must be reported.
Why does it matter to you? There is no tax impact to you when you file the form. It is simply a statement outlining your holdings, which ensures transparency with the Canada Revenue Agency (CRA) regarding your foreign assets. It helps maintain the integrity of Canada's tax system by ensuring taxpayers report all income earned from foreign investments. Plus, it aids in combating tax evasion and ensuring everyone pays their fair share. However, missing these filings can carry some of the most significant penalties that exist in our tax system.
Penalties for Non-Compliance: The penalties for failing to file the T1135 form or providing incorrect information can be severe. Penalties start at $25 per day for each failure to report foreign property, with a minimum penalty of $100 and a maximum of $2,500. For repeated failures, the penalties can escalate quickly, potentially reaching up to $12,000 per year.
💡 Tip: It's crucial to file your T1135 form accurately and on time to avoid these hefty penalties. Keep detailed records of your foreign assets and consult with a tax professional if you're unsure about your reporting obligations.
Filing Deadline: The deadline for filing the T1135 form is the same as your income tax return, typically April 30th. However, if you or your spouse are self-employed, the deadline is extended to June 15th. Remember, it's always better to file early and accurately to avoid last-minute stress!
In conclusion, filing the T1135 form is not just a legal requirement; it's an essential step in maintaining compliance with Canadian tax laws and ensuring the integrity of our tax system. Be proactive, stay informed, and file your T1135 form diligently to avoid penalties and contribute to a fair and transparent tax environment.
Remember, when in doubt, it's always wise to seek guidance from a qualified tax professional. Our team of professionals at the Novel Family Office can ensure that you are meeting all of your requirements.
