On Dec. 9, 2015, the Canada Revenue Agency (CRA) released a new
version of prescribed Form T1135 for taxpayers who own specified
foreign property (SFP). The new form allows taxpayers who own SFP
that have a total cost between $100,000 and $250,000 a more
simplified reporting option.
In our blog posted on April 21, 2015, we noted that
promises were made by the Department of Finance when it released
its 2015 Budget to "fix" some of the issues that
practitioners have identified and loudly complained about. The new
Form T1135 now has two sections – Part A and B.
Part A will allow taxpayers who own SFP with a
cost between $100,000 and $250,000 to simply provide the following
the types of SFP held by the
taxpayer, using a "tick-the-box" method;
the countries in which the SFP is
the total amount of income and gains
(losses) from the SFP, reported in aggregate.
Part B is for taxpayers with a SFP cost of more
than $250,000 or those who elect out of Part A. Part B is identical
to the previous version of prescribed Form T1135.
While the new Form T1135 is certainly welcome, taxpayers will
still have to identify all income and gains (losses) from SFP as
before. The major benefit however is for taxpayers who own SFP with
a cost between $100,000 and $250,000 who do not hold their
SFP with a Canadian Registered Securities Dealer.1
Previously, such taxpayers would have to report each individual SFP
separately, on a line by line basis, in sections 1 through 6 on the
old Form T1135. This was quite time consuming and resulted in
substantial time spent by investment advisors and tax preparers who
had to obtain the required information. Now with the new Form
T1135, if all the SFP has a cost between $100,000 and $250,000,
only the requirements of Part A apply.
For those taxpayers who own SFP with a cost more than $250,000,
at any time in the year, there are no additional benefits provided
by this new Form T1135.
The new Form T1135 appears to be a compromise between the CRA
and tax preparers in that the new form encompasses components
(tick-the-box) from the Form T1135 used prior to 2013 and the
detailed Form T1135 that has been in place since 2013. The new form
is a compromise since there are significant comments that have been
made by the tax community that have not been addressed by the new
form (raising the cost amount of SFP that requires disclosure on
the Form T1135, eliminating the reporting of SFP held by Canadian
Registered Securities Dealers, etc.).
Notwithstanding, the CRA/Department of Finance are to be
commended for addressing some of the concerns raised by tax
preparers regarding the old version of prescribed form T1135. Time
will tell if further changes will be made in the future to address
the outstanding concerns of tax preparers.
1. As defined in subsection 248(1) of the Income
Tax Act and discussed in our February 26, 2014 blog on this topic.
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guide to the subject matter. Specialist advice should be sought
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The CRA provides new housing rebates for individuals who have purchased or built a new house or have substantially renovated a house or made a major addition to a house who plan on living in it personally or letting a relative live there.
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