Correcting a Missed T1135 Filing From a Prior Year in Canada

Realizing you should have filed a T1135, the Foreign Income Verification Statement, in a prior year — and didn't — is more common than people think. Maybe you didn't know foreign rental property or an overseas investment account counted as "specified foreign property." Maybe an accountant missed it. Either way, the fix usually isn't as painful as people fear, provided you deal with it before the CRA raises it first.

This guide explains the main route Canadians use to correct a missed T1135 filing: the Voluntary Disclosures Program, how it treats foreign-reporting gaps, and what to have ready before you apply.

Why Fix It Proactively, Rather Than Wait

CRA reviews and audits can flag foreign-property reporting gaps years after the fact, whether through third-party information, other details on your file, or random selection. If CRA identifies the missing T1135 before you come forward, you typically lose access to the more generous relief available for a genuinely voluntary disclosure. Coming forward first — while the door is still open — is almost always the better position to be in.

Your Main Options

• File the missing T1135 on its own, without going through the Voluntary Disclosures Program (VDP). This gets you compliant but does not, by itself, give you any formal protection from penalties for the earlier omission.
• Apply through the VDP. This is the route built specifically for correcting past non-compliance, including unreported foreign property, and it can substantially reduce certain penalties and interest — provided you qualify.

For most people correcting a genuinely missed T1135, the VDP is the stronger option, because it's designed for exactly this situation.

How the Voluntary Disclosures Program Treats a Missed T1135

1. Confirm you still qualify as "voluntary." Under the CRA's current VDP rules, in effect since October 1, 2025, an application can be unprompted — made before CRA has contacted you at all about the issue — or prompted — made after some CRA contact, such as an education letter, but before CRA has taken enforcement action like opening an audit or investigation into the specific issue. Prompted applications are still eligible, just for reduced relief.
2. Prepare a complete application. The disclosure has to be complete — covering all the years and property you missed, not just the easiest one to explain — and involve an actual or potential penalty or interest charge.
3. File the corrected T1135s and any related returns as part of the package.
4. CRA reviews and decides. Relief is discretionary: CRA can grant it in full, in part, or decline it, based on the facts of your case.

As of mid-2026, an accepted unprompted application can receive 100% penalty relief and 75% interest relief, while an accepted prompted application can receive up to 100% penalty relief and 25% interest relief. These percentages, and the ten-calendar-year window that limits how far back relief can reach, come from CRA's current Voluntary Disclosures Program circular — verify the current figures before you rely on them, since this program was substantially revised in late 2025.

What to Gather Before You Apply

• [ ] A list of every specified foreign property you held in each affected year, with the cost amount for each
• [ ] Statements, deeds, or other records showing when you acquired the property and what it cost
• [ ] Any income or gains earned on the property in the years involved
• [ ] Copies of tax returns already filed for those years
• [ ] Any prior CRA correspondence that might affect whether your application counts as unprompted or prompted

What the VDP Doesn't Do

The Voluntary Disclosures Program can reduce penalties and interest, but it never erases the underlying tax owing, if any results from the corrected filing, and relief is never guaranteed — CRA evaluates every application on its own facts and can refuse or partially grant it. Treat an accepted application as a best-case outcome, not an automatic one.

Frequently asked questions