- Specified foreign property — the category of holdings that can trigger a T1135 filing obligation — is specifically defined to exclude property held inside a Canadian registered plan.
- The exclusion generally applies to Canada's core registered plans, including: - Registered Retirement Savings Plans (RRSPs) - Registered Retirement Income Funds (RRIFs) - Tax-Free…
- The logic behind the exclusion is straightforward: Canadian registered plans are already subject to their own contribution-tracking and reporting rules through the financial institutions…
If you hold foreign stocks or U.S. index funds inside an RRSP or a TFSA, it's natural to wonder whether that triggers the same foreign-property reporting headaches as holding them outside a registered plan. The good news is that the RRSP TFSA T1135 exemption is broad and well established: property held inside these accounts is generally excluded from the Foreign Income Verification Statement, no matter what it invests in.
This article explains why that exemption exists, which accounts it covers, and where people sometimes assume it reaches further than it actually does.
The Short Answer: Registered Accounts Are Excluded
Specified foreign property — the category of holdings that can trigger a T1135 filing obligation — is specifically defined to exclude property held inside a Canadian registered plan. It doesn't matter whether the underlying investment is a U.S. blue-chip stock, a European ETF, or a foreign bond fund. If it sits inside a qualifying Canadian registered account, it stays outside the T1135 calculation entirely.
Which Accounts Get This Treatment
The exclusion generally applies to Canada's core registered plans, including:
- Registered Retirement Savings Plans (RRSPs)
- Registered Retirement Income Funds (RRIFs)
- Tax-Free Savings Accounts (TFSAs)
- Registered Education Savings Plans (RESPs)
- Registered Disability Savings Plans (RDSPs)
These plans are registered under Canadian tax law, and that registration — not what the plan invests in — is what earns the exclusion.
Why CRA Structures the Rule This Way
The logic behind the exclusion is straightforward: Canadian registered plans are already subject to their own contribution-tracking and reporting rules through the financial institutions that administer them, and CRA has visibility into these accounts through other channels. Layering a second, separate foreign-property reporting obligation on top of an already-regulated registered account would create duplicate paperwork without adding meaningful information for CRA. Parliament chose to carve these accounts out of the specified foreign property definition entirely, rather than requiring you to look through them to their individual holdings.
What the Exemption Does NOT Cover
This is where the confusion usually starts. The exemption is tied to the account's Canadian-registered status, not to the "retirement" or "savings" purpose behind it. A few things it doesn't reach:
| Situation | Covered by the exemption? |
|---|---|
| Foreign stock held inside your TFSA | Yes — the account is registered |
| The same stock held in a non-registered brokerage account | No — assessed like any other specified foreign property |
| A foreign retirement account, such as a 401(k) or IRA | No automatic exemption — it isn't a Canadian-registered plan |
| Money withdrawn from an RRSP and moved into a foreign account | No — once outside the registered plan, ordinary rules apply |
A Common Mistake: Assuming Every "Retirement-Sounding" Account Qualifies
It's easy to assume that anything functioning like a retirement account gets the same treatment as an RRSP, but the exemption is specific to plans registered under Canadian tax law. A U.S. 401(k) or IRA accumulated while working south of the border doesn't automatically fall into the same category, even though it plays a similar economic role. A foreign retirement-type account needs its own separate analysis — see our companion article on U.S. brokerage and investment accounts for more on how that generally works.
Frequently asked questions
Do I need to report anything at all if all my foreign investments are inside my RRSP?
Generally no — if every piece of foreign property you hold sits inside a Canadian registered plan, you typically have nothing to report on T1135 for that property. Confirm this with a tax professional based on your full picture, including any non-registered holdings.
What if I have both registered and non-registered foreign holdings?
Only the non-registered portion counts toward the T1135 calculation. You'd combine the cost amount of your foreign holdings outside registered plans to see whether you've crossed the filing threshold, leaving out anything held inside your RRSP, TFSA, RRIF, RESP, or RDSP.
Does a locked-in retirement account (LIRA) get the same treatment as an RRSP?
A LIRA is a Canadian-registered retirement vehicle, so it's generally treated the same way as an RRSP for this purpose. If you're unsure whether a specific plan qualifies as a Canadian-registered plan, ask a professional to confirm before assuming either way.
I have an old employer pension from a foreign job — does that count as a registered plan?
Not automatically. A foreign employer pension isn't a Canadian-registered plan just because it functions like one, and how it's treated for T1135 purposes depends on the specific structure of the plan. This is a case where you shouldn't guess.
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